Offers for Group II 150N recorded sharpest increase, inching up by Yuan 100-200/mt to Yuan 9,400-9,500/mt, also found from a survey.
The price-hike was partly brought by supply shortage in both the domestic and the Asian market, reckoned an industry source.
In the domestic market, Sinopec and PetroChina, China's two oil majors, continued to ration spot supplies on the one hand, releasing only small volumes of mid and high-viscosity base oils and no low-viscosity resources to the domestic market, he said. On the other hand, without replenishment from Taiwan's Formosa Petrochemical Co, one key base oil suppliers to Mainland, domestic supply further tightened, the source said.
The whole Asian market was in scarce supplies of base oils as well, so most international refineries hiked ex-refinery prices for October. Faced with higher importing costs, most domestic traders had to mark up base oil prices, opined the source.
Furthermore, demand for low-viscosity resources improved from most lubricant plants, as they were active in production amid the peak consumption season, he furthered. Thus, underpinned by scarce supplies and strong demands, base oil prices showed upward trend, concluded the source.
As for off-spec base oils, prices also increased on fewer spot supplies when many off-spec resources were used to produce distillates for higher processing margins, because gasoline and gasoil sales were particularly smooth, said the source. Also, in view of higher prices of standard base oils, most end-users turned to off-spec resources as alternative. The warmer demands also pushed up off-spec base oil prices, explained the source.
Low-viscosity base oil prices would keep uptrend in October due to persistently limited supplies in the domestic market.
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