Suppliers into India, for instance, underscored that requirements had been fairly steadfast, despite the start of the monsoon season, which typically dampens the appetite for raw materials as operations can be affected by logistic and warehousing issues during the heavy rainfall.

Buying interest for naphthenic oils has been strong in India, sources said, with availability still deemed tight, even though significant volumes of U.S. material have been making their way into the country.

Likewise, demand for API Group I oils was deemed healthy and supply remained snug as there had been fewer shipments from origins such as Iran in recent weeks.

Group II and III base stocks have also tightened in Asia on the back of planned and unplanned plant shutdowns. While some units have resumed output, others – such as SK Lubricants’ unit in Ulsan, South Korea – are anticipated to be taken off-line in the next few weeks. SKs 700,000 t/y Group II and 1.3 million t/y Group III base oils unit will be shut down in early June.

The Shell-Qatar Petroleum Pearl gas-to-liquids plant in Ras Laffan, Qatar, which was unexpectedly shut down last November, is reportedly resuming production, with operating rates expected to increase by July. The GTL plant has capacity to make 1 million metric tons per year of Group III, according to LubesnGreases Guide to Global Base Oil Refining.However, some participants said that product flow from the plant may not be back to a regular schedule until later in the year.

Participants reiterated that the first half of the year has been characterized by tight supply on the back of a busy turnaround schedule – not only in Asia, but in other regions as well – coupled with steep feedstock costs and healthy demand, which has led to a steady increase in pricing.

This year has been very turbulent so far, and I do not expect things to change any time soon, possibly not until the end of the year, a source commented.

However, a number of participants expected fundamentals to shift in late July or August, when most facilities in the region were scheduled to be back onstream and a more balanced supply-demand picture might be reestablished.

Some players anticipated the market to be flooded with product after all the maintenance programs have been completed in the region, just when demand slows down ahead of the cooler months. Producers are expected to consider trimming operating rates if this scenario plays out – as they have done in years past when production was curbed in order to avoid excessive supply in the market.

For the time being, however, most reports indicated that tight supply was still offering support to stable-to-firm spot pricing, particularly for Group II base oils.

On an ex-tank Singapore basis, Group I solvent neutral 150 was unchanged at $700/t-$720/t, SN500 was up by $20/t at $860/t-$880/t, and bright stock was heard at $960/t-$980/t.

Group II 150 neutral was hovering at $710/t-$730/t, and 500N inched up by $10/t at $920/t-$940/t, again ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was slightly up by $10/t at the high end of the range at $570/t-$600/t, and SN500 was assessed at $770/t-$790/t FOB. Bright stock was unchanged at $820/t-$840/t, although some lower numbers have started to emerge.

Group II base oils were steady at $630/t-$650/t for 150 neutral and $830/t-$850/t for 500N/600N.

In the Group III segment, 4 centiStoke and 6 cSt oils were hovering at $770/t-$790/t, while 8 cSt was heard at $750/t-$770/t, all FOB Asia.

Upstream, crude oil futures continued their upward trek ahead of an OPEC meeting on Thursday on expectations that the oil-producing countries would agree to extend output cuts implemented early this year for another nine months.

ICE Brent Singapore July futures settled at $54.08 per barrel on May 22, up from $52.15/bbl on May 15.

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.