The S-Oil plant in Onsan was slated to begin a one-month maintenance program at its Group III plant sometime in March, but no confirmation could be obtained as to the exact date and duration of the outage. S-Oils unit can produce 1 million t/y of Group III base oils.

In Malaysia, Petronas was also heard to have started a turnaround in late February at its plant in Melaka, Malaysia, which can produce 268,000 t/y of Group III base oils. The plant was expected to remain off-line until the first week of April.

Later in the year, Formosa Petrochemical was anticipated to take its Group II plant in Mailiao, Taiwan, off line for routine maintenance in July, to coincide with a more sedate pace of seasonal activity in the base oils segment.

The producer was heard to be gradually trimming the volumes shipped under contract into China, which regularly receives substantial amounts from Taiwan, plus it will likely suspend spot shipments in order to build inventories for the turnaround.

Chinas base oil consumption consists to a large extent of imports, with Formosas cargoes making up close to 15 percent of all imports, sources said.

Also down the road, the Hyundai/Shell base oils unit in Daesan, South Korea, was heard to be due for a one-month turnaround in August. The plant has capacity to produce 650,000 t/y of Group II base oils.

Traders said that spot business had been on the quiet side in Asia, perhaps because many cargoes were moving under contract and a number of consumers had padded inventories ahead of the turnarounds and the recent price increases earlier in the year.

Also, there was a perception that availability from other sources other than regional suppliers, such as the Middle East and the United States, could help bridge the supply gap until the units in Asia resumed production. Several Middle East cargoes of Group II and III oils were heard to have been booked into China and India in recent weeks.

There have been reports that Group I parcels had started to move from Iran to India once again, following a short interstice when availability from Iranian Group I producers had been limited.

U.S. naphthenic base oils were heard to be constantly moving into India as well, helping maintain a balanced supply/demand ratio at home, and meeting growing demand for base oils in India.

Base oil prices were assessed stable in Asia during the week, buoyed by snug availability and firm crude oil values.

On an ex-tank Singapore basis, Group I SN150 was steady at $740/t-$760/t, and the SN500 cut at $850/t-$870/t. Bright stock was holding at $930/t-$950/t, all ex-tank Singapore.

Group II 150 neutral was unchanged week-on-week at $760/t-$780/t, and 500N was heard at $910/t-$930/t ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was gauged at $680/t-$700/t, and the SN500 grade was hovering at $780/t-$800/t. Bright stock was heard at $830/t-$860/t FOB Asia.

Group II 150N was steady at $700/t-$720/t, and the 500N/600N at $800/t-$830/t, all FOB Asia.

In the Group III segment, the 4 centiStoke and 6 cSt grades were assessed at $810/t-$830/t, and the 8 cSt at $790/t-$810/t, FOB Asia.

Upstream, crude oil prices retreated on Thursday as investors took profits after a price rally earlier in the week, but losses were limited by the continuing efforts of the Organization of Petroleum Exporting Countries and its allies to curb supplies, Reuters reported.

U.S. refiners are also receiving less OPEC-produced oil as the groups members continue to curb output.

Oil prices have jumped nearly 10 percent in the past two weeks, driven by a weaker U.S. dollar and tensions between Iran and Saudi Arabia, which have raised concerns about possible Middle East supply disruptions.

Brent May futures were trading at $68.98 per barrel on the London-based ICE Futures Europe exchange on Thursday, March 22, compared to $65.20 per barrel on March 15.

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

LubesnGreasesshall not be liable for commercial decisions based on the contents of this report.