Muted Base Oil Group I Demand, Tight Light Grades Amid Balanced Group II & III Supplies

Key Highlights

• Group I spot prices softened on oversupply and muted demand.
• Group II values steady-to-soft, with tightness in light grades.
• Group III mostly stable, though 4 cSt and 8 cSt weakened.
• Buyers delaying bulk purchases until post-monsoon demand revival.

Base Oils Market Price

• Market mostly steady to soft; some grades slipped on oversupply.
• Ex-tank Singapore:
  1. SN150 steady at $810–850/t.
  2. SN500 ↓ $10/t to $1,050–1,090/t.
  3. Bright stock stable at $1,390–1,430/t.
  4. Group II: 150N steady $850–890/t; 500N ↓ $10/t to $1,060–1,100/t
   
• FOB Asia:
  1. SN150 steady $690–730/t.
  2. SN500 ↓ $10/t to $880–920/t.
  3. Bright stock ↓ $10/t to $1,260–1,300/t.
  4. Group II: 150N steady $710–750/t; 500N ↓ $10/t to $880–920/t.
  5. Group III: 4cSt ↓ $10/t to $1,080–1,120/t; 6cSt steady $1,080–1,120/t; 8cSt ↓ $10/t to $950–990/t.

• Group I spot import prices registered small downward adjustments amid ample availability, with increased Iranian supplies and Chinese offers exerting pressure. 
• Group II values stayed steady to soft, capped by weaker crude and feedstock costs. Group III remained broadly stable, though 4 cSt slipped slightly on a CFR India basis.

Supply & Demand: Imports weigh, light grades stay tight

• In Group I, demand was muted as buyers delayed additional procurement until post-monsoon, despite growing Iranian and Chinese offers. 
• Group II supplies remained balanced, with most buyers relying on term contracts. 
• Domestic refiners favored heavy-grade production for better margins, leading to tightness in light grades. 
• Imports from South Korea and some U.S. light grades continued supplementing supply. 
• Group III demand aligned with availability, though 4 cSt and 8 cSt grades were more plentiful than 6 cSt, creating localized pressure.

Global Trade: Iranian, Chinese, Korean cargoes shape flows

• Iranian cargoes added to supply but faced limited acceptance due to sanctions.
• Chinese Group I tenders for September shipment attracted some Indian interest, though bookings remained unclear.
• South Korean heavy-grade volumes continued flowing into India, while U.S. Group II light offers failed to meet supplier price expectations.
• A UAE refiner was heard offering Group III spot quantities for September lifting.

Market Outlook: Steady-to-soft bias until post-monsoon pickup

• Near-term sentiment points to steady-to-soft pricing. Group I may stay under pressure from excess supply and low seasonal demand until industrial and transport activity strengthens post-monsoon. 
• Group II prices are expected to remain capped by weaker upstream costs and ample imports, though light grades could stay relatively tight. Group III is likely to stay stable with a slightly soft bias, especially for 4 cSt and 8 cSt. 
• Buyers are expected to continue a cautious, need-based procurement strategy through mid-September.