SINGAPORE --Base oils in India have fallen for the first time in nine months and September prices have been negotiated $50-70/tonne lower than last month on falling crude and gasoil values, said buyers and sellers on Tuesday.
Falling crude and gasoil prices since the end of July, poor buying sentiment and ample inventories with finished lube makers helped exert downward pressure on September discussions, said a key buyer.
Prices for Group II lighter neutrals like N100-200 for September delivery were negotiated down nearly $50-70/tonne at around or even lower than $1500/tonne CFR (cost and freight) India, said buyers and sellers.
"Indian buyers have been very aggressive after months of price hikes in the base oils market and are asking for even further reductions for October supply," said a regional seller.
Base oils prices in India surged from $830-850/tonne CFR in January this year to $1450-1550/tonne CFR during August, a near 80% jump on spiking crude and gasoil values.
Extremely tight regional and global base oil supply as refineries focussed on the more lucrative gasoil and fuels market also exacerbated pricing woes.
Several small-to-medium finished lube makers in India had reduced operations, as they were unable to secure supplies or pass on high costs to consumers in the past few months.
But the sentiment turned bearish after crude values corrected downwards from their peaks towards the end of July. Base oil producers achieved lower costs and higher margins since July, and ramped up production rates to alleviate overall supply, said regional traders.
Buyers elsewhere in the region were also pushing for hefty discounts to prevailing prices although firm deals were still few in the wider Asian market, said buyers and sellers.
However, buying sentiment was poor and extremely cautious now, said a Singapore-based trader.
"I am getting ridiculous bids below $1300/tonne ex-tank Singapore and so there is hardly any product movement," added the trader.
There are more sellers willing to discuss prices in the region than were seen in the last few months, said several buyers. However now, buyers were taking a wait-and-see stance in the hope of even lower prices, they added.
"It s good that Indian prices have dropped, this should happen in the southeast Asian market too eventually," said a large regional lube blender. Group I SN-150 base oils in Singapore was pegged at $1470-1530/tonne ex-tank according to ICIS pricing in the week closing 22 August.
Large base oils producers in Asia include Exxon Mobil, Shell, SK Energy, GS Caltex and S-Oil.
Falling crude and gasoil prices since the end of July, poor buying sentiment and ample inventories with finished lube makers helped exert downward pressure on September discussions, said a key buyer.
Prices for Group II lighter neutrals like N100-200 for September delivery were negotiated down nearly $50-70/tonne at around or even lower than $1500/tonne CFR (cost and freight) India, said buyers and sellers.
"Indian buyers have been very aggressive after months of price hikes in the base oils market and are asking for even further reductions for October supply," said a regional seller.
Base oils prices in India surged from $830-850/tonne CFR in January this year to $1450-1550/tonne CFR during August, a near 80% jump on spiking crude and gasoil values.
Extremely tight regional and global base oil supply as refineries focussed on the more lucrative gasoil and fuels market also exacerbated pricing woes.
Several small-to-medium finished lube makers in India had reduced operations, as they were unable to secure supplies or pass on high costs to consumers in the past few months.
But the sentiment turned bearish after crude values corrected downwards from their peaks towards the end of July. Base oil producers achieved lower costs and higher margins since July, and ramped up production rates to alleviate overall supply, said regional traders.
Buyers elsewhere in the region were also pushing for hefty discounts to prevailing prices although firm deals were still few in the wider Asian market, said buyers and sellers.
However, buying sentiment was poor and extremely cautious now, said a Singapore-based trader.
"I am getting ridiculous bids below $1300/tonne ex-tank Singapore and so there is hardly any product movement," added the trader.
There are more sellers willing to discuss prices in the region than were seen in the last few months, said several buyers. However now, buyers were taking a wait-and-see stance in the hope of even lower prices, they added.
"It s good that Indian prices have dropped, this should happen in the southeast Asian market too eventually," said a large regional lube blender. Group I SN-150 base oils in Singapore was pegged at $1470-1530/tonne ex-tank according to ICIS pricing in the week closing 22 August.
Large base oils producers in Asia include Exxon Mobil, Shell, SK Energy, GS Caltex and S-Oil.
