Asia Base Oil Price Report(AUGUST 22, 2017)

2017-08-25   来源：润滑油情报 网友评论 0 条

Asia Base Oil Price Report
BY GABRIELA WHEELER

Base oil prices were stable to soft in Asia this week, with some segments showing a lengthening in supply levels, and values coming under pressure as a result.

From most accounts, the light viscosity base oils were well supplied, and it appeared possible to obtain cargoes without too much difficulty, leading to lower buying indications for grades such as the API Group II 150 neutral in some markets.

Participants also pointed at volatile crude oil prices in recent weeks as another key element impacting base stock values.

Crude futures ended slightly lower last week amid extremely choppy trading due to conflicting trends. On one hand, the U.S. oil rig count fell by the most since January, and on the other, the International Energy Agency and OPEC monthly reports revised their forecasts, predicting higher global demand, but hinting that the rebalancing process remained slow.
 
Compliance to oil production cuts by OPEC members was spotty in July, but the recent meeting in Abu Dhabi raised hopes of better compliance in August and September.

ICE Brent Singapore October futures were hovering at $52.62 per barrel at the close of Asia’s trading on August 21, from $51.88/bbl on August 14.

Aside from uncertainties upstream, posted price decreases for base oils in the U.S. were thought to be weighing on market sentiment in Asia as well.

U.S. producer Motiva reduced its Group II grades by 5, 10, and 21 cents per gallon, depending on the cut, effective August 15.

Flint Hills Resources lowered its Group II postings by 5, 11 and 22 cents/gal as of August 21.

Whether other U.S. suppliers would also revise prices remained unclear, although there were rumblings that a large refiner, who operates base oil plants in Europe and Asia too, was evaluating conditions.

In the past, prices in the U.S. start to slide when there is an oversupply of base oils in the domestic market, and the extra volumes have often found their way into outlets such as India and China.

Increased availability of competitively-priced imports sometimes generates price pressure on regional indications in Asia, if conditions allow for the arbitrage between regions.

Another factor that was expected to impact base stock prices was the seasonal slowdown in demand that has already started to be noticed in a number of downstream segments.

While activity in those lubricant applications that serve the automotive industry appeared to be steady, other segments such as the industrial sector were showing slight signs of declining demand.

Many manufacturers slow down, or halt operations temporarily during the year-end holidays, and they lower their raw material requirements in the months leading to this period so as to avoid finishing the year with high inventories.

Aside from changes on the demand side, supply was also expected to grow in the region as fewer plant turnarounds were scheduled for the remainder of the year, with the exception of a few shutdowns taking place in China at present.

Both Shandong Hengrunde and Sinopec Maoming Petrochemical were heard to have taken their base oil plants off-line, but were expected to restart operations by the end of August. Sinopec was heard to be planning to shut down its Group II unit in Gaoqiao, Shanghai, in mid-August for a one-month maintenance program.

It was also reported that Chinese importers had sufficient cargoes to meet current requirements and had turned more cautious towards acquiring additional shipments as they expected local availability to be adequate in the next few months.

According to statistics, import volumes into China have declined steadily since June.

At the same time, Taiwanese producer Formosa Petrochemical was anticipated to increase the spot volumes shipped to China in August and September as supply was expected to be more plentiful, and Taiwanese buyers' requirements – which are Formosa's main priority –were sufficiently covered.

There were also expectations that Group III availability would increase in coming weeks with the return to production of the Shell-Qatar Petroleum gas-to-liquids (GTL) refinery in Ras Laffan, Qatar, following an extended shutdown that started late last year. The Pearl GTL unit can produce 300,000 metric tons per year of Group II and 1,072,000 t/y of Group III base oils, according to Lubes’n’Greases’ Global Guide to Base Oil Refining, and was understood to have been restarted, with product expected to be available this month.

Spot price assessments in Asia were stable to soft this week, with a number of grades adjusted down to reflect current discussions.

On an ex-tank Singapore basis, Group I solvent neutral 150 was notionally revised down by U.S. dollars $20 per metric ton to $670/t-$690/t. SN500 and bright stock were down by $10/t at $830/t-$850/t and $920/t-$940/t, respectively.

Group II 150 neutral was lower by $20/t at $680/t-$700/t, and 500N was assessed down by $10/t at $880/t-$900/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was steady at $560/t-$580/t and SN500 at $730/t-$750/t FOB. Bright stock was adjusted down by $10/t at $750/t-$770/t to reflect lower bids and offers.

Group II 150N was unchanged at $570-590/t, and the 500N/600N grades at $800/t-$820/t, all FOB Asia, on a lack of reported transactions.

In the Group III segment, the 4 centiStoke and the 6 cSt grades were steady at $760/t-$780/t, and the 8 cSt cut at $740/t-$760/t FOB Asia.