A fire hit Japanese refiner Idemitsu's lubricant production facility at its Chiba refinery today, forcing the refiner to halt operations at the facility.
Idemitsu is unsure about the cause of the fire and when the company can resume normal operations at the lubricant unit. But other facilities, including the 190,000 b/d crude distillation unit and the 374,000 t/yr ethylene cracker, are unaffected and operating as usual.
Idemitsu's Chiba refinery owns a 11,600 b/d lubricant hydrotreating unit and a 2,000 b/d lubricant dewaxing process unit. The refiner sold 1.14mn kiloliters (19,523 b/d) of lubricants during the April 2023-March 2024 fiscal year, down by 1.4pc on the year.
Japan has traditionally been a net exporter of base oils, but the country's supplies have tightened significantly since Eneos closed its Negishi refinery in October 2022 and Wakayama refinery in October 2023. This latest incident could further curtail Japanese Group I base oil exports.
Tight regional supplies for Group I base oils supported stable spot prices, while prices of Group II neutrals have been steadily declining given weakening sentiment. Argus-assessed Asian fob export prices for Group I held steady in the week ending 28 June, while prices for Group II fell by $20/t.
