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Asia Base Oil Price Report(NOVEMBER 22, 2019)

2019-12-05 作者:润滑油情报网   来源: 网友评论 0

摘要:Asia Base Oil Price Report(NOVEMBER 22, 2019)
Economic uncertainties and a decline in base oil demand from downstream lubricant segments, together with the approach of the year-end holidays, continued to exert downward pressure on pricing in Asia.
 
Demand for base oils typically declines in the run-up to Dec. 31, but this year, the situation seemed to be more pronounced due to the many uncertainties affecting the region’s economic prospects, which directly influenced activity in industries such as the automotive segment and heavy manufacturing, both huge consumers of lubricants.
 
The lack of resolution to the United States-China trade dispute exacerbated the situation in many countries of the region as well.
 
The slowdown was particularly evident in industrial sectors, which have been hit hard by the trade war. “The manufacturing downturn in 2019 has been so pronounced that we think it could aptly be labeled as the third global industrial recession in the past 10 years, following the activity drops witnessed in 2012 and 2016,” strategists at Bank of America Merrill Lynch explained to the media earlier this month.
 
Countries such as India, whose automotive industry had displayed impressive growth rates last year – driven by the rising income demographics of a large and advancing emerging economy – have also been impacted by the global slowdown, and auto sales have shown a steady decline in recent months.
 
Car sales in India suffered a significant drop in September, with sales of passenger vehicles plunging 24 percent to 223,317 units, and domestic sales of trucks and buses falling more than 39 percent to 58,419 units, the Nikkei Asian Review said in an article, citing data released by the Society of Indian Automobile Manufacturers.
 
The Indian government recently announced a series of measures, including a delay in increasing the registration fees for new vehicles and asking banks to lower interest rates on loans for cars and two-wheelers, but it is not clear whether these measures would be enough to promote sales, a BBC News article noted.
 
The general economic uncertainties in Asia have translated into weaker lubricant sales and lackluster base oil demand, sources said, adding that they hoped the start of the new year would bring a change in market conditions.
 
Buyers in countries that celebrate the Lunar New Year – which falls in late January 2020 – were anticipated to return to the market to replenish inventories ahead of the festivities. However, consumers are generally cautious about securing too much product due to concerns that pricing might be lower after the festive period finishes.
 
Aside from the effects from softer demand, supply was also expected to rise over the next few weeks as new plants were anticipated to come on stream in China, and a Southeast Asian producer has restarted its plant, following a turnaround.
 
Pertamina was heard to have restarted its plant in Cilacap, Indonesia, the first week of November, after the completion of a turnaround that started in late September. The unit can produce 449,000 metric tons per year of Group I base oils, according to Lubes’n’Greases Guide to Global Base Oil Refining.
 
Given prevailing market conditions, Asian base oil spot prices were assessed steady-to-soft, with some grades undergoing moderate downward adjustments to reflect discussions.
 
Ex-tank Singapore Group I prices for the solvent neutral 150 grade were down by $20/t at $680/t-$700/t, and the SN500 was also adjusted down by $20/t to $730/t-$750/t. Bright stock edged down by $30/t to $820/t-$840/t, all ex-tank Singapore.
 
The Group II 150 neutral and 500N were revised down by $20/t to $720/t-$740/t and $730/t-$750/t, respectively, ex-tank Singapore.
 
On an FOB Asia basis, Group I SN150 was down by $10/t at the low end of the range at $540/t-$570/t, and the SN500 grade was down by $10-20/t at $550/t-$560/t. Bright stock was assessed down by $20/t at $700/t-$720/t, FOB Asia.
 
Group II 150N was holding at $570/t-$590/t FOB Asia, while the 500N and 600N cuts were steady at $590/t-$610/t, FOB Asia.
 
In the Group III segment, the 4 centiStoke and 6 cSt were unchanged at $770-$800/t and $780/t-$825/t, respectively. The 8 cSt grade was hovering at $720-740/t, FOB Asia for fully approved product.
 
Upstream, crude oil futures retreated somewhat on Thursday – after posting steep gains in the previous session on a U.S. crude inventory draw – as tensions over Hong Kong added to concerns that there would not be a resolution to the U.S.-China trade dispute before the end of the year.
 
The trade war between the world’s two biggest economies has dominated the outlook for future oil demand, and experts have warned the completion of a “phase one” U.S.-China trade deal could be delayed until next year, according to Reuters.
 
On Nov. 21, Brent January futures were trading at $62.66 per barrel on the London-based ICE Futures Europe exchange, compared to $62.89/bbl on Nov. 14.
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