INSIGHT
Samantha Wright, Senior Editor Manager
Base Oil Report
Europe European base oils prices were unchanged in mid-May for all Groups. Group I domestic grades were experiencing tightness as volume availability was set to decrease amid upcoming refinery turnarounds. SN500 faced increased demand as well as lower stock, though any price impact was slow to materialise. Truck availability was also named as a challenge given public holidays in Europe at the beginning of May. The Group II spot market benefitted from the recent weakness in the US dollar. Demand stabilised as tariffs concerns discouraged some long-term commitments from participants. In the Group III market there were signs that 4cSt availability was starting to tighten amid planned maintenances having taken place in the Middle East and Asia at the start of the second quarter. European export supply of brightstock was still extremely short, while SN500 availability tightened further.
US
Base oils prices in the US were generally stable in mid-May, except for low viscosity Group II values. Production constraints tightened spot availability, pushing N100 domestic and export prices higher. Chevron is due to be back online in May after its turnaround, so Group II availability will begin to improve. Tariff pressures persist on the periphery of base oils, as some additive manufacturers will separately begin implementing a tariff surcharge in May.
Asia
Asian base oils prices were largely steady in mid-May. The Group I base oils market was supported by persistently tight supply. In parts of northeast (NE) Asia, buying sentiment for SN150 and SN500 has largely been deferred to mid-May after the Labor Day break. In southeast (SE) Asia, spot market activity remained muted, reflecting limited spot availability and the predominance of contractual obligations. In India, domestic Group I supply remained stable, but import volumes may shrink as an Iranian refiner commenced a month-long turnaround. Weak demand sentiments
continue to offset supply-side concerns. Group II markets were largely muted amid relatively stable market fundamentals. Despite the return of GS Caltex, availability across Asia stayed limited, with particular tightness observed for heavy grade material. Overall outputs from South Korea remained low, while India’s domestic Group II supply is reduced due to HPCL’s ongoing turnaround. Group III talks and discussions were subdued amid lukewarm demand in China and India. Due to ongoing and upcoming turnarounds in the Middle East and South Korea, supply balances stayed relatively snug. However, the lack of demand outlets continue to offset limited supply.
Middle East
The Middle East base oils market was steady in mid-May. Discussions tapered off with buyers exercising caution in their procurement, preferring to buy on a needs basis. Pockets of discussions continue to take place in the Group II market although sentiment remained bearish given the soft outlook due to the ongoing trade war. South Korean refiners were reported to have limited supply for May loading cargoes of both 150N and 500N. Group III sentiment was soft, despite supply tightness. Supply from BAPCO and ADNOC stayed limited amid ongoing turnarounds, while South Korea-origin spot availability was snug.
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LUBE MAGAZINE NO.187 JUNE 2025
69
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