For the Quarter Ending June 2023

North America

During the second quarter, the overall base oil market in the US contracted as compared to the first quarter, which was influenced by the higher interest rates. A downtrend of base oil prices in the US has been observed for another quarter due to the persistent rise in interest rates accounted by the FED has negatively affected overall demand. As per the data, the Industrial Production Total Index for the US fell from 103.1 (April) to 103 (May), causing the economic activities to be low. Despite the Memorial Day Holiday on May 29, suppliers had not met expectations due to higher inventories than the previous year. Reservoirs were ample enough to meet the demand. Regardless of simulating buying interest by offering lowered prices, acquisition remained low. Moreover, domestic companies such as Chevron and SK Enmove were reducing the prices of Group III during May. Economic uncertainties and high lubricant prices influenced the prices to decrease and settle at USD 1413 per tonne continuously Base Oil group II N 100 FOB Texas during the end of May.

Base Oil Prices: https://www.chemanalyst.com/Pricing-data/base-oil-63

Asia

During the second quarter, the overall base oil market in Asia remains to grow as compared to the first quarter, which was influenced by the disruption in the supply chain. The constant uptrend of Base Oil, considering improved domestic demands and depressed supply in the market has influenced the prices till the second week of May. As per the market sources, the quantities of cargoes from Northeast and Southeast Asia had decreased in May along with Taiwanese cargoes, affecting China's supply chain. However, increased feedstock crude oil prices and its operating cost tender the prices. Despite having a supply cut of Group I base oil from Indonesia, Thailand, and Singapore, ample stockpiles at domestic producers led the prices to drop during June. Additionally, Dalian Hengli Petrochemical was shut down till mid-June for Group II/ III Base oil in China. Likewise, the steady demand for material has influenced the prices to hover around USD 978 per tonne Base Oil II H-500-FOB China during the end of May.

Europe

During the second quarter, Europe's overall base oil market is comparatively weaker than the the first quarter. The second Quarter of 2023 has experienced an upward trend due to the rolling demand for Group II Base Oil till the second week of May 2023. As the blenders were shifting their production from Group I to Group II, a notable difference in demands was observed for finished lubricants. Some offers Group 1 limited the export from Europe and the depleted stocks of Russian Oils, which affected the overall supply chain of API Group I and Group II Base Oil. Moreover, the sluggish economic activity hampered the effective price trend of commodities. However, the traders showed negligible interest amidst ample product availability, stable the prices of Base Oil till June. Likewise, the steady supply of base oil within Europe and fluctuating crude oil market trend had influenced the prices of Base oil to remain steady during the end of June.

Base Oil Prices: https://www.chemanalyst.com/Pricing-data/base-oil-63

MEA

During the second quarter, several countries in Middle East Asia showed different pricing trends. The second quarter of Saudi Arabia has experienced a minimal decreasing trend, followed by the previous quarter. Base oil from Russia has been imported to Saudi Arabia at an alternative cheaper price after sanction from Europe for their own consumption. Additional discounts on raw materials as well as finished products were received in order to sustain their trade activities and maintain their existence in the market. Ample supplies influenced the prices to settle at 1750 Base Oil Group III 8cSt (FOB) Dammam during May. The second quarter of UAE have experienced a marginal upward trend before dropping extensively in the first quarter amid a stable demand-supply gap for the product. However, a slight increase in trading activities was observed during May as the Russian refineries were eager to sell large quantities of Base oil. Due to the temporary hold on the Turkish market, Base oil prices hardly fluctuated to settle at 1465 USD/ tonne Base oil II Light SN Ex-Dubai during April.


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