INSIGHT
Samantha Wright, Senior Editor Manager
Base Oil Report
Europe Group I spot prices rolled over at the end of November amid limited trading. Relatively balanced supply and demand dynamics endured despite European major MOL’s ongoing force majeure on base oils. Imports from the US also maintained supply stability in the Group II market, resulting in prices remaining unchanged. Group III ranges narrowed for all grades, with less imports putting upward pressure on the low end of the ranges. European Group I export spot values moved down with lower offers separately noted from several producers. The narrowing gap between export and domestic prices put downward pressure on values. Tightness persisted across the heavier grades on the export market, with very limited brightstock availability.
US
US base oils markets remained under pressure at the end of November as supplies largely outpaced demand against the backdrop of bearish crude, feedstock and diesel markets, squeezed lubricants margins and sustained macroeconomic concerns during the Q4 destocking season. Demand for both Group I and Group II volumes in Brazil ticked up amid an ongoing production disruption at the primary local Group I producer.
Asia Group I supply length persisted across the wider Asian region, with the continued movement of additional bulk volumes into southeast Asia and south Asia, and intermittent European-origin cargoes adding to availability. Group II markets remained divergent amid a light-grade snugness and heavy-grade supply overhang. The picture also differed across the region, with healthy demand observed in India, soft buy sentiment in China, and relatively steady offtake in southeast Asia. Group III trading activity was muted in China for South Korean-origin material, with limited supply offsetting soft demand.
Middle East Group I heavy-grade prices continued to slip at the end of November, under the pressure of supply length in both Group I SN500 and Group II 500N/600N. On the other hand, SN150 held steady on the back of balanced fundamentals, with patchy supply offset by limited demand. Light versus heavy grade price divergence continued in the Group II markets. Light-grade 150N maintained at prevailing levels on support from still-strong gasoil values, with heavy-grade 500N/600N markets slipping. Four consecutive weeks of gasoil hikes raised concerns about the profitability of base oils over gasoil, which presented as a top-line concern for producers who were observed raising offers for light-grade base oils. Meanwhile, improvements in the supply landscape of Group III markets saw prices for Bahraini material land at softer levels. For end-users not requiring OEM approvals, improved availability was expected to weigh on prices. However, end-users of OEM-approved material continued to face snug supply from South Korea.
icis.com
LUBE MAGAZINE NO.190 DECEMBER 2025
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