Additionally, one base oil producer unexpectedly shut down its facilities last week, while a second supplier has delayed the restart of its operations.

It was heard that Taiwanese producer Formosa Petrochemical Corp. had taken its 600,000 metric tons per year API Group II base oil unit in Mai-Liao, Taiwan, off stream on April 13 due to sudden mechanical issues. It was not clear how long the base oils unit would be down.

In China, Sinopec Maoming was understood to have shut down its 400,000 t/y Group II/III base oils unit for a turnaround in mid-March. The turnaround was anticipated to last until mid-April, but there were reports that it had been extended into May.

At the same time, some of the Asian plants that have been undergoing turnarounds have either been restarted or are about to be brought back on line.

Such appears to be the case for ExxonMobils 1.6 million t/y Group II plant in Singapore, and GS Caltexs 1.2 million t/y Group II unit in Yeosu, South Korea. Both were anticipated to be restarted this month.

News circulated the market that the Shell/Qatar Petroleum Pearl gas-to-liquids plant in Ras Laffan, Qatar, would start to ramp up production as well, feeding hopes that the current Group III tightness would start to ease. However, plant operators said that the process could last a few months, possibly extending into the summer.

A number of turnarounds in Japan, South Korea and China are scheduled to commence between now and June, sources said, prolonging the current tightness in supply.

Producers were heard to be building inventories to support contract commitments during the outages with limited volumes to offer for spot transactions, and this was supporting steeper spot offers.

Buyers were aware of the snug conditions, but many were resisting the higher values, as it has been difficult to transfer the higher feedstock costs down the supply chain. Bids were therefore not matching offers and a gap of at least U.S. $10 to $20 per metric ton hampered the conclusion of spot deals.

Market players were also closely watching the movement of crude oil numbers over the last couple of weeks. Oil futures have been moving up on expectations that OPEC members and other producers would continue to curb output to support prices in the second half of the year, as they had agreed to do in the first half.

However, futures slipped slightly on Monday as analysts perceived signs of an uptick in U.S. production, which could undermine OPEC’s goal.

ICE Brent Singapore June futures settled at $55.38 per barrel on April 17, compared to $55.59/bbl on April 10.

Spot base oil indications in Asia were assessed largely stable this week as they continued to receive support from tight supply, steady demand and firm feedstock costs, but the number of concluded deals was small because of local holidays and the limited spot cargoes on offer.

On an ex-tank Singapore basis, API Group I solvent neutral 150 was unchanged at $690/t-$710/t. SN500 was steady at $820/t-$840/t, and bright stock was heard at $990/t-$1,010/t ex-tank Singapore.

Group II 150 neutral was assessed at $700/t-$710/t and the 500N was gauged at $870/t-$890/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was hovering at $570/t-$590/t; SN500 was stable at $770/t-$790/t FOB; and bright stock was at $905/t-$925/t FOB.

Group II base oils were also assessed unchanged from a week ago, with the 150N heard at $630/t-$650/t and the 500N/600N at $830/t-$850/t FOB Asia.

In the Group III segment, the 4 centiStoke and 6 cSt oils were steady at $740/t-$760/t, and 8 cSt was at $710/t-$730/t, all FOB Asia.

Market participants also voiced concerns about regional geopolitical pressures, including the current tension between North Korea and the United States.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com.

LNG Publishing shall not be liable for commercial decisions based on the contents of this report.