With concerns about global product shortages assuaged by U.S. producers returning to full operations, and demand slowing as the year winds down, prices in Asia experienced little fluctuation during the week. - by Gabriela Wheeler
Steady fundamentals continued to support stable to firm base oil prices in Asia, with some segments of the market showing tight availability as requirements remained healthy. - by Gabriela Wheeler
There was an upswing in spot pricing for some of Asias base oils, driven by a regional tightening of supply and increased export inquiries on the back of refinery outages and a force majeure in the U.S. - by Gabriela Wheeler
China is one of the worlds largest importers of base oils, and that looks unlikely to change as its finished lubricant market continues to grow. By 2021, base oil consumption in the country is forecast to exceed 8.8 million metric tons, up 11 percent from 2016, according to ICIS.
The worlds growing hunger for fuel-efficient engine oils is good news for API Group III base oils, but the market will be oversupplied by 1 to 2 million tons per year for the next five years or longer, predicts U.S. consultant Stephen Ames.
Base oil traders in China are watching business dry up, partly because of an oversupply in the international market, speakers at an industry conference in Beijing said last week. The situation is dire enough, many agreed, that some traders will be forced out of business while others are changing business models.
Indias base stock demand is shifting from API Group I to Group II and III because the growing need for high-performance lubricants is transforming the countrys 2.3 million ton lubricants market, consultancy Kline & Co. concluded.
Asian refiners have long helped quench the worlds thirst for API Group II and III base stocks, but they will face growing competition both abroad and at home from suppliers in the Middle East and elsewhere, according to ICIS analysts.
Hengli Petrochemical Co. announced this month the start-up of a Northeast China refinery that includes a 540,000 metric ton per year API Group II and III base oil plant.
Hyundai and Shell Base Oil Co. announced the opening of its API Group II plant in Daesan, South Korea, on Sept. 25.