SINGAPORE--Asian base oils prices are holding firm for now despite a more than 20% drop in upstream crude and gasoil prices, said base oils buyers and sellers on Tuesday.
"Buying sentiment is weaker and buyers are pushing us for lower prices, but we have fixed August business at prices higher than July," said a northeast (NE) Asian base oils producer.
Lighter neutrals Group I and II -150 were settled in the low-to-mid $1500s/tonne CFR (cost and freight) Asia while higher neutrals like Group I and II - 500 were still tight and fetching premiums of $20-30/tonne over the lighter grades, said sellers.
August prices rose $20-40/tonne over July despite the falls in crude and gasoil values amid lingering tight supply, said Asian traders.
Buyers in many markets, especially India, had turned cautious and were staying away from the market.
There were a lot of fresh cargoes from Russia and Iran that had reached or were on their way to India but buying interest was currently below the prices at which the cargoes were transacted, said a southeast (SE) Asian trader.
While the last done deals into India for SN-150 were close to $1530-1550/tonne CFR, current buying indications were lower at $1500/tonne on an ex-tank basis, he added.
Another base oils cargo from Indonesia which had been bought by a trader at hefty premiums to published prices at the peak of base oils market frenzy was now scouting for buyers in the region, said traders.
China, which had imported record high volumes of base oils this year, also seemed to be cooling off a bit although prices were still stable there, said a trader who sells into China. Buying ideas for SN-150 were still in the low-to-mid $1500 s/tonne CFR China against offers some $100/tonne higher.
Market discussions currently were focussed on the timing and extent of base oils price falls which would provide a breather for the downstream finished lubricants sector that had been reeling from spiralling prices in the last few months and had been unable to pass on costs.
Several regional independent finished lube makers had reduced operations or shut down as they were unable to compete with large integrated refiners and lube makers who had raised baseoils prices but had not raise finished lube prices to a similar extent.
As a base oils producer said: "Base oils production costs have collapsed but prices only move lower in this industry when inventories are tank top- and we are probably not there yet."
Benchmark Group I/II 150 grade prices were hovering around $1470-1550/tonne CFR Asia on Tuesday, nearly double the numbers the same time last year.
"Buying sentiment is weaker and buyers are pushing us for lower prices, but we have fixed August business at prices higher than July," said a northeast (NE) Asian base oils producer.
Lighter neutrals Group I and II -150 were settled in the low-to-mid $1500s/tonne CFR (cost and freight) Asia while higher neutrals like Group I and II - 500 were still tight and fetching premiums of $20-30/tonne over the lighter grades, said sellers.
August prices rose $20-40/tonne over July despite the falls in crude and gasoil values amid lingering tight supply, said Asian traders.
Buyers in many markets, especially India, had turned cautious and were staying away from the market.
There were a lot of fresh cargoes from Russia and Iran that had reached or were on their way to India but buying interest was currently below the prices at which the cargoes were transacted, said a southeast (SE) Asian trader.
While the last done deals into India for SN-150 were close to $1530-1550/tonne CFR, current buying indications were lower at $1500/tonne on an ex-tank basis, he added.
Another base oils cargo from Indonesia which had been bought by a trader at hefty premiums to published prices at the peak of base oils market frenzy was now scouting for buyers in the region, said traders.
China, which had imported record high volumes of base oils this year, also seemed to be cooling off a bit although prices were still stable there, said a trader who sells into China. Buying ideas for SN-150 were still in the low-to-mid $1500 s/tonne CFR China against offers some $100/tonne higher.
Market discussions currently were focussed on the timing and extent of base oils price falls which would provide a breather for the downstream finished lubricants sector that had been reeling from spiralling prices in the last few months and had been unable to pass on costs.
Several regional independent finished lube makers had reduced operations or shut down as they were unable to compete with large integrated refiners and lube makers who had raised baseoils prices but had not raise finished lube prices to a similar extent.
As a base oils producer said: "Base oils production costs have collapsed but prices only move lower in this industry when inventories are tank top- and we are probably not there yet."
Benchmark Group I/II 150 grade prices were hovering around $1470-1550/tonne CFR Asia on Tuesday, nearly double the numbers the same time last year.
