Base oils and waxes
Overview
As the world pivots towards decarbonisation, challenges and opportunities loom for base oils production and demand. Staying on top of this market is more important than ever to realise these opportunities and mitigate pricing risk.
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Latest base oils and waxes news
Browse the latest market moving news on the global base oils and waxes market.
India’s base oil imports rise on year in October
India’s base oil imports rise on year in October
Singapore, 30 December (Argus) — India's base oil imports rose by 20pc on the year to 212,711t in October, data from GTT show. The increase in imports is likely because of lower domestic production owing to plant maintenance. Vehicle sales in India increased by 12pc on the year to nearly 2.6mn units in October, data from the Society of Indian Automobile Manufacturers show. This likely supported demand for finished lubricant. But base oil imports in October fell by 10pc on the month, following two consecutive months of increase in August and September. South Korean imports stood at 77,833t in October, increasing by 33pc on the year and decreasing by 33pc on the month. Arrivals from Taiwan surged in October. Taiwanese exports to India resumed in September and October, after minimal volumes in August. The sole Group II base oil plant in Taiwan operated at a reduced rate from the end of May to October. By Chng Li Li India base oils imports (t) Oct'24 m-o-m ± % y-o-y ± % Jan-Oct 24 y-o-y ± % South Korea 77,833 -32.6 33.3 975,377 47.1 Singapore 37,735 13.1 22.0 339,805 23.4 Saudi Arabia 28,533 36.4 12.8 203,977 -13.2 Taiwan 22,407 393.9 279.1 88,657 3.1 UAE 18,797 101.3 60.4 220,524 20.2 Monthly total 212,711 -10.0 20.0 2,307,618 21.1 Source: GTT Total includes all countries, not just those listed Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Viewpoint: Ample supply to weigh on base oils market
Viewpoint: Ample supply to weigh on base oils market
London, 18 December (Argus) — European base oil prices are likely to fall further in 2025 on a persistent global supply overhang of Group III material and weaker demand for Group I spot supplies. European Group III spot prices with varying approvals face downwards pressure as overseas producers target European buyers supported by attractive margins and ample spot supplies. Stricter emission standards and engine oil specifications have supported a switch towards more premium base oils such as Group II and III away from Group I production, which is in long-term decline. Prices for fca northwest Europe (NWE) Group III 4cst and 6cst supplies with partial or no approvals fell by 16pc and 13pc to €1,125/t and €1,185/t, respectively on the week ending 13 December 2024, the lowest levels since April 2021. Rising Chinese domestic Group III production capacity has slashed the country's requirements for supplies from South Korea and the Mideast Gulf, incentivising suppliers to look towards the European market. Buying appetite for tenders out of Bahrain has also increased and spot supplies have arrived at more competitive levels. This has spurred other suppliers to lower offers further as they look to remain competitive and claim market share before the conclusion of upcoming Group III refinery expansions in 2025. The Mideast Gulf has an estimated Group III production capacity of 2mn t/yr. This is set to increase with state-controlled Saudi Aramco's base oil subsidiary Luberef focusing on expansion projects at its Yanbu facility . This will increase nameplate capacity by 76.2pc, to approximately 1.3mn t/yr of base oils by 2025. Europe remains the most attractive export outlet owing to smaller Group III production capacity in comparison to other regions. Europe has an estimated nameplate base oil capacity of 7mn t/yr, of which 13pc is Group III. A shift away from Group III imports in the US has further supported Mideast and South Korean suppliers to redirect supplies from this region and towards Europe. An announcement by Shell to convert its hydrocracker at its 147,000 b/d Wesseling refinery in west Germany into a Group III base oil production unit looks to increase domestic output by 300,000t/yr. But production is only anticipated to begin in 2026-2028, leaving European buyers mostly dependent on imports in 2025. European demand has plummeted thanks to amply supply levels — leading to a continuous wait-and-see approach from traders as they anticipate prices to fall further. Participants have reported term contracts finalised at price levels well below year ago levels and anticipate spot prices in 2025 to drop as a result. European Group I nameplate capacity has fallen by 55pc over the last decade to around 4mn t/yr owing to refinery closures, according to Argus calculations. In 2024, Eni's Group I 600,000 t/yr Livorno unit shut, and there were several refinery fires and outages elsewhere in Europe. But despite tighter spot supplies, prices fell because of weaker demand. Demand is anticipated to fall further in 2025 as producers prioritise output of more premium base oil. This includes Polish firm Orlen's Gdansk refinery expansion , adding a group II base oil unit with an estimated capacity of 400,000t/yr of Group II. Exxonmobil also announced that it will produce a high-viscosity Group II alternative to the Group I bright stock grade by 2025 out of its Jurong refinery in Singapore. Bright stock currently has no alternative, which supports its production. But Exxon's announcement is likely to weigh on refinery output and shrink the Group I market further. By Christian Hotten Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Group II base oil margins rise, prices flat
US Group II base oil margins rise, prices flat
Houston, 10 December (Argus) — US Group II base oil margins rose because feedstock and competing fuel costs fell while spot prices held steady. The Argus domestic spot US Group II N100 premium to four-week average low-sulphur vacuum gasoil (VGO) rose to $1.12/USG from $1.11/USG last week. Margins remained below year-earlier levels of $1.37/USG. The Argus domestic spot US Group II N100 premium to four-week average US Gulf coast diesel was 92¢/USG, up from 90¢/USG a week earlier. Margins also rose above year-earlier levels of 90¢/USG. Group II spot prices were steady last week because refiners were not interested in dropping prices further as buying demand remains weak. Excel Paralubes' 22,200 b/d base oil unit in Westlake, Louisiana, was also still down for an unplanned maintenance which curbed some downward pressure on growing supplies. Group II mid-viscosity grade supplies are ample while light- and -heavy grades are balanced. Four-week average feedstock VGO prices fell on lower crude values and weaker fluid catalytic cracker (FCC) margins. Tighter VGO supplies continued to mitigate some of this downward pressure, keeping demand stable. The low-sulphur VGO premium to four-week average WTI crude widened to $12.63/USG, up from $12.44/USG last week. Refiners continue to push more VGO towards base oil production because of weaker competing fuel margins. While base oil demand is lackluster, it remains at a premium to fuels such as gasoline and diesel. By Karly Lamm Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s base oil imports rise in 1H FY24-25
India’s base oil imports rise in 1H FY24-25
Singapore, 2 December (Argus) — India's base oil imports rose by 33pc on the year to 1.54mn t in the first half of the country's 2024-25 fiscal year, between April and September, data from GTT show. Blenders likely imported more cargoes owing to a decrease in domestic base oil production caused by plant issues and maintenances. This happened despite a slowdown in India's economic growth. The country's GDP is estimated to have grown by 6pc in April-September, compared with 8.2pc in the same period in the previous year, government data show. Vehicle sales in the country reached 1.31mn units between April and September, a 12.5pc increase from the previous year, according to data from the Society of Indian Automobile Manufacturers (Siam). This likely boosted demand for finished lubricant. Base oil imports in September rose for the second consecutive month to 236,427t, as demand increased towards the end of the monsoon season. South Korea continued to be the top supplier to India, with imports reaching 115,487t in September, an 81pc increase from the previous year. By Chng Li Li India base oils imports t Sep'24 m-o-m ± % y-o-y ± % Apr-Sep FY24/25 y-o-y ± % South Korea 115,487 29.9 80.7 648,412 63.4 Singapore 33,356 -4.8 -31.0 215,775 35.2 Spain 22,896 177.6 201.3 80,309 71.0 Saudi Arabia 20,917 21.6 82.1 120,738 11.2 Qatar 11,047 594.3 1,235.8 78,950 41.3 Total 236,427 11.8 22.1 1,537,599 33.2 Source: GTT Total includes all countries, not just those listed Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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