Argus Base Oils

Argus Base OilsBase oil market prices, news and analysis

Global trade flows, freight rates, feedstock fundamentals 2-3Markets 4-21News and analysis 22-24Maintenance and market fundamentals 25-27

contents

Asia-Pacific $/tLow High ±

Group ISN 150 ex-tank Singapore 715.00 745.00 -45.00SN 500 ex-tank Singapore 705.00 735.00 -40.00Bright stock ex-tank Singapore 1,060.00 1,090.00 -20.00SN 150 fob Asia 570.00 605.00 -40.00SN 500 fob Asia 545.00 585.00 -35.00Bright stock fob Asia 970.00 1,010.00 -25.00Group II N150 ex-tank Singapore 690.00 720.00 -15.00N500 ex-tank Singapore 695.00 720.00 -12.50N150 fob Asia 550.00 595.00 -22.50N500 fob Asia 560.00 600.00 -20.00

northeast Asia $/tLow High ±

Group ISN 150 cfr 600.00 640.00 -45.00SN 500 cfr 595.00 635.00 -45.00Bright stock cfr 1,050.00 1,100.00 -20.00Group IIN150 cfr 615.00 655.00 -40.00N500 cfr 620.00 665.00 -35.00

India and UAe $/tLow High ±

Group ISN 150 (LVI) cfr India 600.00 630.00 -25.00SN 500 (LVI) cfr India 610.00 640.00 -25.00Bright stock cfr India 815.00 855.00 -45.00SN 150 (LVI) cfr UAE 585.00 625.00 -25.00SN 500 (LVI) cfr UAE 595.00 635.00 -25.00Group II N150 cfr India 610.00 640.00 -30.00N500 cfr India 625.00 655.00 -30.00

europe $/tLow High ±

Group ISN 150 fob domestic NWE 690.00 730.00 -40.00SN 500 fob domestic NWE 725.00 755.00 -40.00Bright stock fob domestic NWE 880.00 910.00 -40.00SN 150 fob European export 580.00 610.00 -25.00SN 500 fob European export 635.00 675.00 -25.00Bright stock fob European export 710.00 750.00 -40.00Group II N150 fca ARA 805.00 830.00 -40.00N600 fca ARA 860.00 890.00 -40.00Group III 4cst fca NWE 991.00 1,072.00 -22.006cst fca NWE 1,003.00 1,078.00 -22.008cst fca NWE 985.00 1,061.00 -21.50

Russia and FsU $/tLow High ±

Group ISN 150 fob Baltic Sea 490.00 520.00 -40.00SN 500 fob Baltic Sea 500.00 530.00 -40.00SN 150 fob Black Sea 500.00 530.00 -30.00SN 500 fob Black Sea 540.00 570.00 -30.00

Us $/tLow High ±

Group ISN 150 fob 545.00 594.00 -30.50SN 500 fob 617.00 665.00 -44.50Bright stock fob 947.00 994.00 +0.00Group II N100 fob 533.00 583.00 -31.00N220 fob 537.00 586.00 -27.00N600 fob 561.00 609.00 -39.00Group III (domestic)4cst 1,002.00 1,052.00 -38.006cst 1,014.00 1,065.00 -31.508cst 1,017.00 1,068.00 -31.50naphthenic base oilsPale oil 60 fob 729.00 776.00 -44.50Pale oil 100 fob 780.00 827.00 -17.00Pale oil 500 fob 779.00 825.00 -20.00Pale oil 2000 fob 807.00 853.00 +0.00Global base oil prices have fallen. Sellers in most markets have

cut their prices in a bid to keep pace with falling feedstock prices. Markets where such moves have lagged the drop in crude have seen a slowdown in demand, as buyers hold back in anticipation of such a move. Buyers have anyway continued to buy small volumes on a more regular basis, to minimise their price exposure and take advantage of plentiful supplies.

crude oil and gasoil futures ±

Ice Brent front month ($/bl) 47.67 -3.29Ice gasoil front month ($/t) 473.00 -6.75

oveRvIew

pRIces At A GLAnce

Copyright © 2015 Argus Media Ltd

Issue 15-02 Friday 16 January 2015

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Argus Base Oils Issue 15-02 Friday 16 January 2015


fob Us export

SN 150 569.50

SN 500 641.00

N100 558.00

N600 585.00

fob european export

SN 150 595.00

SN 500 655.00

N150 fca ARA 817.50

N600 fca ARA 875.00

cfr UAe (LvI)

SN 150 605.00

SN 500 615.00

fob Black sea

SN 150 515.00

SN 500 555.00

fob Baltic sea

SN 150 505.00

SN 500 515.00cfr ne Asia

SN 150 620.00

SN 500 615.00

N150 635.00

N500 642.50

fob Asia

SN 150 587.50

SN 500 565.00

N150 572.50

N500 580.00

cfr India

SN 150 (LVI) 615.00

SN 500 (LVI) 625.00

N150 625.00

N500 640.00

ARGUs mARket mAp $/t

Freight rates (Us) * $/t

Route 1,000t 3,000t 5,000t 10,000t

US Gulf coast-Rotterdam 75-78 60.00 50.00 43-46

US Gulf coast-Brazil 85.00 70.00 60.00 50.00

US Gulf coast-Far East 110.00 72-74 57.00 52.00

US Gulf coast-India 135.00 100-105 85.00 75.00

* rates for November 2014, provided by SPI Marine (www.spimarineusa.com)

Freight rates (Asia-Pacific) * $/t

Route 3,000t 5,000t

Singapore-central China 49.00 43.00

Singapore-Indonesia 32.50 29.50

Singapore-Thailand 33.50 30.50

Singapore-WC India 46.50 42.50

Singapore-Japan 58.50 52.50

Japan-central China 36.50 31.50

Mideast Gulf-WC India 42.00 33.50

Mideast Gulf-central China 72.00 66.50

South Korea-US Gulf coast 97.00 89.00

South Korea-WC India 72.50 63.50

South Korea-Singapore 36.00 32.00

South Korea-Japan 28.00 25.00

South Korea-central China 30.00 26.00

South Korea-Taiwan 30.00 25.00

South Korea-Europe 144.00 127.00

* rates based on one port loading/one port discharge

* rates provided at market close on 15 January by SPI Marine (www.spimarineasia.com)

Arbitrage opportunities - Group I $/tsecond centre less sn 150 sn 500first centre this week prior week this week prior week

Europe export-Singapore +135.00 +155.00 +65.00 +80.00

Baltic Sea-Singapore +225.00 +230.00 +205.00 +205.00

Europe export-UAE (LVI) +10.00 +10.00 -40.00 -40.00

Asia-US domestic +67.00 +42.00 +144.00 +139.00

Europe export-US domestic +59.50 +49.50 +54.00 +59.00

Black Sea-India (LVI) +100.00 +95.00 +70.00 +65.00

Asia-India (LVI) +27.50 +12.50 +60.00 +50.00

Baltic Sea-US domestic +149.50 +124.50 +194.00 +184.00

Baltic Sea-domestic NWE +205.00 +205.00 +225.00 +225.00

US export-Singapore +160.50 +175.00 +79.00 +74.50

Arbitrage opportunities - Group II $/tsecond centre less n100/n150 n500/n600first centre this week prior week this week prior week

Asia-ARA +245.00 +262.50 +295.00 +315.00

Asia-US domestic +75.50 +59.00 +116.00 +105.00

Asia-India +52.50 +60.00 +60.00 +70.00

US export-ARA +259.50 +268.50 +290.00 +291.00

US export-India +67.00 +66.00 +55.00 +46.00

US export-Singapore +147.00 +131.00 +122.50 +96.00

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Global base oil prices are mixed relative to competing and feedstock fuels. Margins remain unusually firm for the time of year, as lower crude and diesel prices more than outweigh slumping outright base oil prices.

European domestic SN 150 price premiums to 30-day average Ice gasoil futures have fallen to $190/t. But the premium remained much higher than levels around $105/t the same time last year. The premium of SN 150 over four-week average vacuum gasoil (VGO) has eased to $351/t. But this price remained unusually high for the time of year.

US domestic N100 price premiums over 30-day average US heating oil futures have risen to $0.28/USG. This compared with around $0.17/USG the same time last year. The premium to four-week average VGO has risen to $0.68/USG, much higher than levels in the first half of last year.

In Asia-Pacific, the premium of ex-tank Singapore SN 150 over Ice gasoil held firm at around $207/t versus around $160/t the same time last year. The premium of ex-tank prices over four-week average high-sulphur fuel oil prices has fallen to $436/t.

Prices have been slumping since the third quarter of last year, mostly because of the sustained drop in crude prices during the same time. The degree and length of the price slide has complicated buying and selling strategies, as all parties seek to minimise their exposure to the price risk caused by the falling prices. Such concerns highlight the lack of the kind of risk management tools that other markets enjoy, which enable them to continue trading activity.

But the sustained price slide has also helped to mask the impact of the growing global supply overhang. The price drop has supported producers’ margins as prices struggle to keep pace with, rather than outpace, lower crude. Firm margins have curbed any urgency to cut run rates, limiting the size of any drop in supplies in recent months.

The price drop has also complicated any moves to work arbitrage opportunities. A persistent oversupply of Group II base oils in US had originally targeted the Indian market late last year as a key outlet. The overhang of European bright stock had been offered into many markets throughout Asia-Pacific in the fourth quarter. Asia-Pacific Group II producers have been eyeing firm Group I and Group II prices in Europe in recent months.

With no risk management tools, such arbitrage opportunities have been hard to work without buyers exposing themselves to the risk of market prices falling far

Feedstock FUndAmentALs

below the price level at which they bought the supplies one to two months earlier. Several such trades took place last year, prompting buyers to cut back requirements even further as they sought to manage their subsequent losses.

A key requirement for such arbitrage opportunities to be feasible in this market is stable prices for an extended period. The price stability turns into its own risk management tool. Many buyers and sellers are subsequently keen for the slide in crude and base oil prices to pause or come to an end.

But the persistent availability of the supplies for export highlights the supply overhang waiting to be cleared. The inability to work the arbitrage has prevented these cargoes from moving to already well-supplied markets. The more limited supplies have in turn reduced pressure on prices and margins.

Steadier crude and base oil prices would reduce concerns about exposure to price risk and would likely aid such arbitrage flows. But a pick-up in such arbitrage activity would boost competition and supplies for such outlets.

With steadier crude, the price pressure on base oils caused by falling crude values would ease. But the price pressure caused by additional supplies from arbitrage flows would rise. These would finally highlight the extent of the supply overhang that the market faces.

Us domestic base oils premium to vGo 2% $/USG

0.00

0.20

0.40

0.60

0.80

1.00

1.20

17 Jan 14 16 May 14 12 Sep 14 16 Jan 15

SN 150 N100

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crude $/bl

±

Dubai crude front month 44.79 -2.43

SN 500 premium to Dubai crude 34.84 -2.50

oil products $/bl

±

Singapore 0.05% gasoil 61.65 -2.70

Gasoil premium to Dubai crude 17.28 +0.40

SN 500 premium to gasoil 17.98 -2.23

Asia sn 500 forward prices $/t

Low High ±

Feb 2015 555.00 575.00 -46.10

Mar 2015 558.10 578.10 -46.00

Apr 2015 561.20 581.20 na

2Q 2015 565.30 585.30 -45.80

3Q 2015 580.15 600.15 naThe price shows the implied forward-curve base oil price required to maintain its existing profit margin relative to Ice gasoil futures. Refer to www.argusmedia.com for methodology

Asia sn 500 forward premium to gasoil $/t

midpoint ±

Feb 2015 48.90 -5.05

Mar 2015 45.80 -5.10

Apr 2015 42.65 na

2Q 2015 38.55 -5.35

3Q 2015 23.70 naThe premium shows the implied forward-curve profitability of fob Asia SN 500 relative to Ice gasoil futures. Refer to www.argusmedia.com for methodology

Asia-Pacific base oil prices have fallen, although the pace of the drop lagged the sustained fall in feedstock prices amid signs of steadier buying interest in the region.

A major regional producer is cutting its prices for the second time this month, reflecting the impact of sliding crude prices.

Buyers remain cautious. But this caution has prompted many of them to operate with unusually low inventories, at least until base oil prices stabilise. They are subsequently replenishing stocks, with small volumes, on a more regular basis.

chinese buying interest begins to stirBuying interest from China is also starting to stir. Buyers in this market remain cautious but their stocks are also low. Widespread plant run cuts in that country, combined with maintenance in Taiwan and South Korea in March, have also reduced some of the regional supply overhang of Group II base oils.

But the scope for any price recovery will likely be muted. Spot supplies remain readily available, while more production capacity in southeast Asia is likely starting up any time now. Some buyers also have the flexibility to switch between Group I and Group II base oils, such that any widening discount of either grade can trim demand for the other grade.

Group I availability in the region is more balanced, although demand is also increasingly limited.

thailand offers February suppliesThailand has sold most of its spot supplies for January and has started offering February-loading supplies. A Japanese producer has a smaller volume of spot supplies this month compared with last month after it trimmed its operating rates at the start of this month. It currently expects to have no spot supplies available next month.

The Thai producer is offering as much as 6,000t of February-loading supplies of mainly SN 500, as well as bright stock and some SN 150. It was targeting the same price levels for light- and heavy-neutrals as its January prices. It was looking to offer bright stock at around $1,000/t fob.

The producer has likely sold most of its January-loading spot supplies of heavy-neutrals, although it possibly still has surplus supplies of bright stock. A small shipment of heavy-neutrals was likely sold last week to China. The price for the shipment was deemed to be at a discount to

Group I $/t

Low High ±

SN 150 ex-tank Singapore 715.00 745.00 -45.00

SN 500 ex-tank Singapore 705.00 735.00 -40.00

Bright stock ex-tank Singapore 1,060.00 1,090.00 -20.00

SN 150 fob Asia 570.00 605.00 -40.00

SN 500 fob Asia 545.00 585.00 -35.00

Bright stock fob Asia 970.00 1,010.00 -25.00

Group II $/t

Low High ±

N150 ex-tank Singapore 690.00 720.00 -15.00

N500 ex-tank Singapore 695.00 720.00 -12.50

N150 fob Asia 550.00 595.00 -22.50

N500 fob Asia 560.00 600.00 -20.00

ex-tank singapore reference prices $/t

Group I Group II

sn 150 sn 600 Bright stock n150 n500

815.00 820.00 1,175.00 730.00 740.00

AsIA-pAcIFIc

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AsIA-pAcIFIc

market levels.Another Thai producer has also been offering 2,000t of

SN 500 for January loading. It was unclear if the supplies were sold this week.

A January-loading cargo of less than 2,000t of SN 500 and bright stock of Japanese origin was likely sold to a buyer in southeast Asia. The price level for the SN 500 was around the midpoint of last week’s Argus published prices. The bright stock was sold at a discount to published price levels.

No offers were seen for supplies from Indonesia, with domestic prices remaining much higher than prices in other markets.

The premium of Asia-Pacific bright stock prices to European prices remained unusually wide. But falling Asia-Pacific prices and more plentiful spot availability will likely complicate any such moves to work this arbitrage. A vessel was provisionally booked to load a cargo from Europe at the end of January with the option to go to China.

The pick-up in Chinese buying interest extended to Group II base oils. But buyers in this market remained cautious, especially in anticipation of a large volume of supplies from Taiwan expected to reach the country around the end of this month. While export volumes from Taiwan are firm for now, the island’s Group II producer is no longer offering any spot supplies as it readies for a shutdown in March for maintenance.

A South Korean producer continued to receive enquiries for light- and heavy-grade Group II base oil supplies for delivery to southeast Asia.

Another producer was moving only term supplies to buyers in southeast Asia this month. It faced no pressure from inventories, after firm spot sales to India and China in January. It was maintaining its operating rates at 80pc but will consider raising its run rates if demand picks up.

sellers cut ex-tank pricesBuyers’ caution, combined with the need to hold sufficient stocks to sustain operations, has boosted activity in the ex-tank market. But requirements were for small volumes, with buyers replenishing stocks more frequently.

A Singapore-based trading firm was targeting price levels around $720/t ex-tank Singapore for N150 and N500. The prices were some $70/t lower than its previous levels. It offered Group III 2cst at $1,075/t ex-tank and 4cst and 6cst at $1,145/t.

Competitively priced Group II supplies from a major supplier were also boosting interest in these volumes at

vessel enquiries: Asia-Pacific t

Loading port next port B/L date volume

Yosu Nantong 16-29 Jan 2,000

Portugal India/China End-Jan-ely Feb 4,000

Daesan Mumbai 25-31 Jan 3,000-4,000

Malacca Antwerp 10-20 Feb 6,200

Source: shipping agents, brokers

Fob Asia Group I vs Group II $/t

-100

-50

0

50

100

10 Jan 14 9 May 14 5 Sep 14 9 Jan 15

N150 vs SN 150 N500 vs SN 500

the expense of other ex-tank sellers. The attraction of such supplies will increase further following another price cut that will come into effect next week. The supplier is cutting its Group I prices by $40/t and its Group II prices by $30/t, effective 21 January.

Buying interest for its supplies extended to Malaysia, with prices increasingly attractive even with the extra trucking costs to supply this market.

Availability of Group III supplies was more plentiful. Offers of spot supplies were around $995-1,005/t ex-tank southeast Asia.

Webinar Base Oils Market – Falling Prices - Where’s the bottom? Base Oils Analyst Alvin Chew and Base Oils Reporter Joyce De Thouars discuss the recent fall in base oil prices, and whether prices have bottomed out.

illuminating the markets EventsConsulting

Market Reporting

Click here to listen or visit www.argusmedia.com/News/Webinars-and-Presentations/2014/Base-Oils-Market-Falling-Prices for more information.

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china domestic prices

Yn/t $/t Low High ± Low High ±

Group I, SN 150

northeast

Daqing 6,800.00 6,900.00 +0.00 1,099.00 1,115.00 +5.00

Dalian 6,800.00 6,900.00 +0.00 1,099.00 1,115.00 +5.00

north

Yanshan 7,000.00 7,300.00 -200.00 1,131.00 1,180.00 -27.50

south

Maoming 7,000.00 7,300.00 -200.00 1,131.00 1,180.00 -27.50

Group I, SN 400

northeast

Fushun 6,800.00 6,900.00 +0.00 1,099.00 1,115.00 +5.00

Dalian 6,850.00 7,000.00 +0.00 1,107.00 1,131.00 +5.00

south

Maoming 7,000.00 7,300.00 -200.00 1,131.00 1,180.00 -27.50

Group II, N150

east

Gaoqiao 7,300.00 7,500.00 -200.00 1,180.00 1,212.00 -27.00

south

Huizhou 7,000.00 7,200.00 -100.00 1,131.00 1,164.00 -11.00

china import price calculator *

Yn/t $/t Low High ± Low High ±

Group I (imported prices)

SN 150 6,607.00 6,914.00 +317.50 1,068.00 1,117.00 +56.00

SN 500 6,568.00 6,875.00 +317.00 1,061.00 1,111.00 +55.50

Bright stock 10,060.00 10,444.00 +494.50 1,626.00 1,688.00 +87.00

Group II (imported prices)

N150 6,722.00 7,029.00 +355.50 1,086.00 1,136.00 +62.00

N500 6,760.00 7,105.00 +393.50 1,093.00 1,148.00 +68.50

* inc. 6% customs duty, 17% VAT and 1,711.50 Yuan/t consumption tax.

Northeast Asian base oil prices have weakened further on the back of falling crude prices and cautious buying activity.

But market signals were more mixed. Trading firms and downstream users have maintained their inventories at low levels for a prolonged period as they secured small volumes on a need-to only basis. But that has left them at risk to any short-term supply tightness.

consumption tax rises againProducers have tightened availability in response to the oversupply and weak demand. The Chinese government also raised by about 135 yuan/t ($22/t) the consumption tax for base oils and lube products. The tax increase is the third in less than two months.

The combination of tighter availability and the increase in costs because of the tax rise has provided some price support.

But many market participants remained cautious because of the sustained downwards pressure caused by sliding crude prices. Uncertainty about the possibility of another increase in the consumption tax also added to a reluctance to commit to taking large volumes.

There was a pick-up in enquiries for cargoes as some buyers started to prepare to restock ahead of the spring oil-change season. But purchases were still made on a need-to basis for now amid expectations that prices have yet to bottom out.

Group I prices in China’s domestic market extended their fall amid scarce buying interest. Refineries kept operations at low rates, with the benefit of lower feedstock prices eroded by the higher consumption tax.

producer cuts pricesSinopec pegged its Group I prices at Yn7,100/t ($1,145/t) ex-refinery for light and heavy grades from its Gaoqiao, Yanshan and Maoming plants. Prices were some Yn200/t lower than last week.

Supplies of SN 150 and SN 400 from PetroChina’s Dalian refinery were offered at Yn6,800-6,850/t ex-refinery. Prices of SN 200 and SN 400 from its Daqing and Fushun refineries stood at Yn6,800/t ex-refinery. While demand was weak, the major producer was reluctant to cut its price offers as the move would do little to spur sales.

Bright stock prices slipped as lower offers failed to attract any firm buying interest. Price offers for bright stock of southeast Asian origin eased to Yn10,500-10,600/t ex-tank in east China.

Buyers showed no interest in offers at $1,100/t cfr or

Group I $/t

Low High ±

SN 150 cfr 600.00 640.00 -45.00

SN 500 cfr 595.00 635.00 -45.00

Bright stock cfr 1,050.00 1,100.00 -20.00

Group II $/t

Low High ±

N150 cfr 615.00 655.00 -40.00

N500 cfr 620.00 665.00 -35.00

Group III $/t

Low High ±

4cst cfr 970.00 1,000.00 -5.00

6cst cfr 975.00 1,000.00 -5.00

8cst cfr 920.00 950.00 -5.00

noRtHeAst AsIA

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lower for bright stock from southeast Asian suppliers. The increase in the consumption tax dampened further the attraction of such offers. Buyers had already been expecting further price-cuts following the slump in crude prices.

A small volume of SN 500 of Thai origin was possibly bought at a low $600/t cfr level. Some Chinese trading firms were possibly seeking to replenish stocks at prices deemed to be attractive compared with domestic prices being offered at relatively higher levels. But the purchase was made before the increase in the consumption tax.

Importers nurse lossesActivity remained subdued in the market for Group I base oils from Russia. Price offers for all four grades were posted at around Yn6,000/t ex-tank Beijing, or the equivalent of around $485/t daf Erlian. Inventories were running low amid muted trading activity. But loss-making deals in the fourth quarter of last year made trading firms increasingly cautious.

The results of Rosneft’s most recent tender to sell supplies from its Angarsk refinery had yet to be released. Chinese importers will only accept prices at around the $300/t cpt Naushki level. Such a level reflected their uncertainty about any further drop in crude prices and the possibility of a further increase in China’s consumption tax.

Sluggish demand also dampened buying interest in the supplies. With deals from the tender unlikely to have been concluded, Rosneft issued a new tender this week. It offered a total of 1,440t of base oils from its Angarsk refinery, for delivery in the last week of January.

Cargo prices fall, ex-tank prices firmerGroup II base oil prices extended their fall. The tax increase and tighter availability of supplies for immediate delivery provided some support for ex-tank prices in China. But with the absence of any pick-up in demand, prices were expected to slide when availability improves again.

CNOOC cut the posted prices for supplies from its Huizhou refinery. It offered N60 at Yn6,950/t ex-tank in east China and N150 at Yn7,200/t.

Sinopec also cut by Yn200/t its prices for Group II spot supplies from its Gaoqiao plant to Yn7,400/t ex-refinery.

Shandong Qisheng Industrial and Trade kept its prices steady. It offered supplies of N60 at Yn6,600/t and N150 at

noRtHeAst AsIA

Yn6,950/t ex-refinery.Panjin Northern Asphalt also maintained its price

offers, with supplies of light- and heavy-grade base oils offered at Yn6,800/t and Yn7,100/t ex-refinery respectively.

Hainan Handi cut its plant’s operating rates, leaving it with no spot supplies of N150 or N500.

Spot supplies of N150 and N500 of Taiwan origin were offered at Yn7,300/t and Yn7,500/t ex-tank respectively in east China. The Taiwan producer has a plant shutdown scheduled in March for maintenance. But its exports to China this month have held firm.

Heavy-grade supplies of South Korean origin were likely offered at Yn7,500/t ex-tank in east China.

A large blender bought a 3,000t cargo of light- and heavy-grade supplies of South Korean origin to meet formulation requirements for the lubricants.

Buyer considers tender to secure suppliesGroup III prices were stable to soft amid general market weakness. An 8,000t shipment of Group III supplies from Mideast Gulf likely reached China recently. Some Chinese buyers also planned to issue tenders in 2015 for purchasing this premium-grade base oils.

China’s wholesale diesel prices dipped again, to Yn5,600/t in east China and Yn5,550/t in south China. The country’s main economic planning agency, the NDRC, cut its ceiling prices for diesel by another Yn230/t during the week.

south korean exports to china / chinese imports ’000 t

0

50

100

150

200

250

300

350

May 13 Nov 13 May 14 Nov 14

South Korean exports to China Chinese imports

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Group I $/t

Low High ±

SN 150 cfr 645.00 675.00 -35.00

SN 500 cfr 660.00 690.00 -35.00

SN 150 (LVI) cfr 600.00 630.00 -25.00

SN 500 (LVI) cfr 610.00 640.00 -25.00

Bright stock cfr 815.00 855.00 -45.00

Group II $/t

Low High ±

N150 cfr 610.00 640.00 -30.00

N500 cfr 625.00 655.00 -30.00

Indian base oil prices have fallen further, amid persistently weak buying interest because of concern that prices will continue to drop again.

With no way to cover their price exposure to a further drop in prices, buyers are minimising inventories and buying smaller volumes on a more regular basis to maintain their lube plant operations.

Lube demand risesFinished lubricating oil demand typically rises around this time of year. Some blenders have seen such a pick-up in demand in recent weeks. Some of them have introduced more promotions and special discounts to spur sales. But the largest blenders have yet to cut their finished lube prices, despite the slump in base oil prices.

To reduce their exposure to lower prices, buyers are targeting supplies that typically involve a voyage time of around 20-25 days. This is instead of some supplies, such as from the US, that usually take more than 40 days. The risk of delays to the shipment of supplies from the US can extend the voyage time even further, adding to a reluctance to secure cargoes from this market.

But offers of US supplies are at significant discounts to supplies from Asia-Pacific. Such discounts help to cover some of the exposure to the possibility of a further drop in prices and continue to attract some interest. Even with such exposure, supplies from the US have continued to move to India, with deliveries this month already exceeding total import volumes in December.

Buyers lean on south korea for suppliesBut the focus on inventory management has prompted buyers to cover more of their requirements through term

Domestic refinery prices

Rs/l * ± $/t ±

Group I

Ioc prices, chennai

SN 70 68.35 +0.00 1,351.00 +13.00

SN 150 64.45 +0.00 1,197.00 +12.00

SN 500 63.95 +0.00 1,168.00 +11.00

Bright stock 94.00 +0.00 1,683.00 +17.00

Ioc prices, mumbai

SN 70 66.35 +0.00 1,312.00 +13.00

SN 150 62.45 +0.00 1,160.00 +12.00

SN 500 59.45 +0.00 1,086.00 +11.00

Bright stock 92.45 +0.00 1,655.00 +17.00

Group II

Ioc prices, chennai

N70 66.71 +0.00 1,285.00 +12.00

N150 65.25 +0.00 1,239.00 +12.00

N500 64.71 +0.00 1,214.00 +13.00

Ioc prices, mumbai

N70 70.65 +0.00 1,361.00 +13.00

N150 63.25 +0.00 1,201.00 +12.00

N500 60.65 +0.00 1,137.00 +11.00

* prices in Rs/l effective from 01 Jan

Group III $/t

Low High ±

4cst cfr 825.00 860.00 -10.00

6cst cfr 835.00 870.00 -10.00

8cst cfr 760.00 800.00 -10.00

IndIA

Indian base oils vs europe $/t

* India midpoint price vs Europe high price

20

40

60

80

100

120

140

17 Jan 14 16 May 14 12 Sep 14 16 Jan 15

SN 150 Bright stock

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contracts, mostly from South Korea. But price offers from South Korean producers have fallen less than for supplies from other Group I and Group II suppliers. The sustained wave of price cuts in response to competing offers from other suppliers seen late last year has also ebbed.

A producer has likely completed its spot sales for January-loading supplies. Its price levels were relatively firm compared with competing suppliers. More than half the volume was light-grade supplies. Its inventories are now quite balanced. It plans to start discussing supplies for February loading from next week.

Another producer completed its spot sales to Indian buyers last week. It sold as much as 7,000t of Group II supplies, at prices some $40-50/t below December price levels. It is targeting sales of a similar volume in February.

There has been a slowdown in offers in recent weeks from another producer, which trimmed its operating rates in second-half December.

Some producers expected demand to get a boost next month, ahead of the shutdowns in March of Formosa Petrochemical’s Group II plant in Taiwan and SK Lubricants’ total base oils production capacity in South Korea.

The shutdowns could boost demand for light-grade supplies especially, also increasing demand in China for such supplies as buyers there also seek to cover their requirements. But the availability of such supplies from Spain could cap the impact in India of the shutdown in South Korea.

Us discounts sustain buyers’ interestCargoes of US origin remained available at discounts to supplies from South Korea. But the earliest delivery time for such supplies was unlikely to be before March. Supplies had been offered by several trading firms. Offer levels had been around the $630-640/t cfr level last week. But offer levels were possibly now being revised following the latest slide in crude prices. Buyers were targeting prices at levels much lower than $600/t cfr.

Group I base oil supplies were also available, with offer levels falling faster than some Group II offers. But buying interest was lukewarm.

A small cargo of bright stock of European origin attracted some buying interest and was subsequently sold. But supplies from other sources were also possibly available.

IndIA

vessel enquiries: India t


Portugal India/China Jan-ely Feb 4,000

Daesan Mumbai 25-31 Jan 3,000-4,000

Rayong Chittagong 31 Jan-1 Feb 3,000


chinese / Indian base oil imports ’000 t

100

150

200

250

300

Nov 11 Nov 12 Nov 13 Nov 14

China India

Supplies of light- and heavy-neutrals from Europe were also possibly being offered.

There was an enquiry for a vessel to load as much as 4,000t of base oils from Portugal at the end of January to take to India.

Supplies from Russia were possibly also available, with price levels around $620-630/t cfr. Buyers were targeting prices lower than $600/t for such supplies. There was less interest in supplies from Iran.

producer offers more suppliesA domestic producer in India offered more Group I supplies for export. It offered through a tender as much as 5,000t of mostly SN 500 and some SN 150 for 20 January-20 February loading. The tender closed on 14 January.

It offered last week as much as 15,000t of SN 500 for loading in three shipments in January, February and March. This tender closed on 7 January.

Group III base oil prices continued to lag the drop in Group I and Group II prices. The firmer price levels have dampened spot demand for the supplies, despite signs of steadier shipment volumes from Bahrain. The premium of 4cst base oils over Group II N150 widened to more than $210/t. Supplies of 6cst base oils were tight.

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Mideast Gulf base oil prices have fallen, as buyers await updated offers in response to the latest drop in crude prices.

The pace of the price slide has left a wide range of price indications in the market. Some sellers are offering at levels that have been revised following the latest fall in feedstock prices. Other offers were unchanged from earlier levels. Other offers were withdrawn, with sellers in the process of revising their price levels.

There is some buying interest, reflecting a combination of firmer demand and many lube blenders holding low stocks. They must consequently buy more frequently to top up their inventories. But the preference is still to hold off as long as possible until prices show signs of stabilising.

Buyers await lower offersThere was plentiful availability of supplies from Iran. Price indications were in a wide range, likely reflecting the impact of the speed of the drop in crude prices. Some offers were possibly still around the $620-640/t fob Iran level. But other offers were pegged at much lower levels below $600/t fob.

A large shipment of base oils from the Black Sea is likely bound for the UAE market. Offers of supplies of Russian base oils were seen. But again the range of such price offers was unusually wide. Most such offer levels were at similar levels to Iranian base oil offers on a cfr UAE basis.

Supplies of on-specification Group I base oils from Europe were also possibly available at competitive levels compared with supplies from the Black Sea market. A cargo of bright stock was also available. But buying interest in the supplies was limited.

Group II sellers revise offers Buyers were awaiting an update of price offers for Group II supplies from the US. Offers had been around $630-640/t cfr. But buyers are now targeting lower levels than this. A shipment in the US is scheduled to complete loading this week before heading for UAE and India. More such supplies were being offered for loading from US at the end of January or early February.

Group II supplies have also been available from Asia-Pacific. But one producer now only has a small volume of supplies remaining for this month, after recently selling a 4,000t cargo to a buyer in the region. Another producer is also eyeing other regions instead of the UAE because

Group I $/t

Low High ±

SN 150 cfr UAE 625.00 665.00 -50.00

SN 500 cfr UAE 640.00 680.00 -50.00

SN 150 (LVI) cfr UAE 585.00 625.00 -25.00

SN 500 (LVI) cfr UAE 595.00 635.00 -25.00

Iran export prices $/t

sepahan oil * ±

SN 500 fob 690.00 0.00

Rubber process oil fob 400.00 0.00

Slack wax fob 700.00 0.00

* prices on a fob Bushehr basis, effective from 26 December - 08 January

Group III $/t

Low High ±

4cst ex-tank UAE 1,055.00 1,085.00 -5.00

6cst ex-tank UAE 1,060.00 1,090.00 -5.00

8cst ex-tank UAE 1,060.00 1,090.00 -5.00

mIdeAst GULF

of more attractive price levels elsewhere. It was in discussions over a 3,500t cargo for late January or early February loading. But no deal has yet been completed.

ex-tank prices hold steadierEx-tank base oil prices were steadier. Buyers’ focus on minimising stocks was sustaining demand for such small-volume supplies. The limited number of sellers also gave them more leverage to support prices, especially as they sought to minimise any downwards price move below levels that they had bought at.

Offers of SN 500 were around $720-740/t ex-tank, with SN 150 some $15-20/t lower than this. Offers of Group II N500 were in a wide $830-880/t range, although there were no longer any offers above the $900/t level. Offers of N150 were around $820-840/t ex-tank.

Group III base oil prices were relatively steady. A large volume of supplies has been exported out of the region in recent weeks, leaving regional availability tighter. A wide premium of ex-tank prices over cfr UAE prices has spurred some buyers to seek cargo volume supplies instead.

Shell said it opened a storage hub in Jebel Ali to receive gas-to-liquids (GTL) base oil shipments from its joint-venture plant in Qatar. The first delivery of GTL base oil supplies reached Jebel Ali in December. Its other key storage hubs are in Houston, Hamburg and Hong Kong.

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Group I $/t

Low High ±

SN 150 fob domestic NWE 690.00 730.00 -40.00

SN 500 fob domestic NWE 725.00 755.00 -40.00

Bright stock fob domestic NWE 880.00 910.00 -40.00

SN 150 fob European export 580.00 610.00 -25.00

SN 500 fob European export 635.00 675.00 -25.00

Bright stock fob European export 710.00 750.00 -40.00

European base oil prices have extended their fall, with demand failing to revive at the start of the new year amid persistent concern about volatile feedstock prices.

With feedstock prices extending their fall, and demand weak, a major supplier in the region cut its prices for a second time this month.

Activity in the export market continued to be hampered by buyers’ subdued demand for large cargoes. But there were signs of a firmer demand for bright stock in some markets like India and Egypt. Sellers are eyeing moving more supplies to Turkey and west Africa. But such shipments face growing competition from more competitively priced supplies from Russia.

Regional blenders held off from buying large volumes as they sought to manage their inventories carefully in anticipation of a further drop in prices. They are waiting for crude prices to stabilise as a first signal towards more stable base oil prices. They have sufficient supplies in stock for now to be able to postpone any buying until next month.

producer cuts prices againRefiners continued to offer discounts to published prices for light grades. But the offers attracted little buying interest. A major supplier likely cut its prices for SN 150 by $40/t, SN 600 by $50/t and bright stock by $20/t. The cut was its second this month, following two such price cuts in December.

Base oil margins have held unusually firm even with the lower prices. Base oils’ premium to vacuum gasoil is already at levels that are reached around the month of May, during the peak of the spring oil-change season. Such levels have fed buyers’ expectations of further price cuts. They have also encouraged refiners to sustain strong production rates. But with the market unable to absorb all of these volumes, oversupply rather than weak margins are starting to spur some run cuts.

The market has been anticipating since last year the likely closure of several Group I base oil plants. The prolonged expectations will likely dampen the impact of any such closures by giving buyers time to switch to suppliers that are less likely to face such an outcome.

plant strike affects outputWhile the anticipated closures are taking place more slowly than expected, they are still causing some temporary disruption to market activity. Base oils production and loadings at one northwest European plant

Group III €/t $/t

Low High ± Low High ±

4cst fca NWE 855.00 925.00 -2.50 991.00 1,072.00 -22.00

6cst fca NWE 865.00 930.00 -2.50 1,003.00 1,078.00 -22.00

8cst fca NWE 850.00 915.00 -2.50 985.00 1,061.00 -21.50

turkey Group I $/t

Low High ±

SN 150 cfr Gebze 560.00 590.00 -50.00

SN 500 cfr Gebze 585.00 615.00 -50.00

eURope

oil products

±

Heating oil 0.1% barge ($/t) 462.00 -17.50

Vacuum gasoil 0.5% barge ($/t) 350.50 -1.50

Vacuum gasoil 1.6% barge ($/t) 334.25 -5.00

Fuel oil 3.5% barge ($/t) 236.25 -9.25

Straight run M-100 fuel oil cargo ($/t) 244.75 -9.25

oil products premiums

Heating oil premium to crude ($/bl) 14.54 -0.63

Heating oil premium to VGO 1.6% ($/bl) 12.91 -1.62

SN 500 premium to heating oil ($/bl) 30.25 -1.17

SN 500 premium to VGO 1.6% ($/bl) 43.16 -2.79

crude $/bl

±

North Sea Dated 47.53 -1.72

SN 500 premium to North Sea Dated 44.79 -1.80

Group II €/t $/t


N150 fca ARA 695.00 716.00 -21.00 805.00 830.00 -40.00

N600 fca ARA 742.00 768.00 -20.00 860.00 890.00 -40.00

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have been affected by the latest strike action at the plant. The strike is in protest against likely job losses resulting from the planned discontinuation of its base oils production. The refinery plans to continue production at least until March to fulfil its contracts.

Group II base oil prices have maintained their wide premium to Group I prices. The price dynamic contrasts with every other major market.

Some buyers are increasing their consumption of the higher quality base oils. Others are waiting for the Group II price premium to Group I prices to narrow and for more choice of supplier. Such a situation should materialise, with various sellers looking at moving Group II supplies into Europe. ExxonMobil’s plants in Baytown, Texas and Singapore are expected to complete the expansion of their Group II base oils capacity any time now.

euro weakness supports Group III priceGroup III base oil prices have held relatively steady in euro terms but fallen in US dollar terms. But the fall in prices continued to lag Group I prices and the fall in Group III prices in other markets like US.

Preparations for maintenance at plants in Europe and South Korea are providing some price support. But the impact of the South Korean plant shutdown will be limited by the availability of supplies from a Group III plant in Spain that started operations last September. Imports from South Korea have already fallen sharply since then. A large volume of supplies from Bahrain has also been moving to Europe in recent weeks.

Besides existing suppliers, Russia’s Tatneft is eyeing the European market with supplies from its 186,000 t/yr Group II/III plant. The new plant began operations in early December. Adnoc’s Group III plant in the UAE is expected to start operations around March or April, with its supplies also likely to target Europe.

Activity in the export market has started to revive. Some trading firms were seeking to move bright stock to the US, Mideast Gulf and Asia-Pacific. A small cargo of European bright stock was sold into India. Egypt also sought through a tender 2,500t of bright stock. The request attracted the attention of many sellers, reflecting the otherwise limited regional buying interest. The tender has closed and is expected to be awarded next week.

Many refiners likely continued to offer supplies at discounts to published prices, although some of them offered within the published prices range. Some deals were done at discounts to published levels.

There were several enquiries for vessels later this

eURope

european forward prices $/t

sn 150 sn 500

Low High +/- Low High ±

Feb 2015 585.00 605.00 -36.10 645.00 665.00 -36.10

Mar 2015 588.10 608.10 -36.00 648.10 668.10 -36.00

Apr 2015 591.20 611.20 na 651.20 671.20 na

2Q 2015 595.30 615.30 -35.80 655.30 675.30 -35.80

3Q 2015 610.15 630.15 na 670.15 690.15 naThe price shows the implied forward-curve base oil price required to maintain its existing profit margin relative to Ice gasoil futures. Refer to www.argusmedia.com for methodology

european forward premium to gasoil $/t

sn 150 sn 500

midpoint ± midpoint ±

Feb 2015 78.90 +4.95 138.90 +4.95

Mar 2015 75.80 +4.90 135.80 +4.90

Apr 2015 72.65 na 132.65 na

2Q 2015 68.55 +4.65 128.55 +4.65

3Q 2015 53.70 na 113.70 naThe premium shows the implied forward-curve profitability of fob Europe SN 150 and SN 500 relative to Ice gasoil futures. Refer to www.argusmedia.com for methodology

vessel enquiries: europe t


Augusta Vado 22-24 Jan 8,500

Livorno Marmara 19-25 Jan 800

Leixoes Aqaba 20 Jan-10 Feb 3,000

Augusta/Livorno Greece Prompt 2,000

Livorno Haifa 18-22 Jan 2,000

Algeciras/ Lexioes Port Sudan 19-25 Jan 2,000

Baltic, Antwerp WAF 31 Jan-1 Feb 6,000-8,000

PJG, Le Hav, Hbrg Sweden/Finland 21-23 Jan 4,460

Livorno / Antwerp Brazil 18-31 Jan 9,500

Rdam Gebze 14-18 Jan 2,500

Rdam Durban Prompt 1,500

Malacca Antwerp 10-20 Feb 6,200


month to take supplies from northwest Europe and the Mediterranean market to Turkey. But competition to supply that market has intensified, amid lower priced offers from the Black Sea market. European export prices moved to a premium to Turkish import prices for the first time since last May.

There was also some buying interest from west Africa, although that market is also becoming a target for Group II base oils. There was an enquiry for a vessel to load as much as 8,000t of base oils from the Baltic and northwest European markets at the end of January to take to west Africa. There was also an enquiry for a vessel to load as much as 9,500t from the Mediterranean market and northwest Europe in second-half January to take to Brazil.

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eURope

tURkey

India 0

Us 1

Russia 2,959

Greece 11,698

netherlands 9,245Germany 43

France 21

Italy 16,344

Iran 0

serbia 0Uzbekistan 2,405

Belgium 0

Hungary 0

turkmeninstan 750

nov 2014

— TurkStat

poland 0

spain 0

morocco 0

Brazil 0

Ukraine 0

tURkey’s key BAse oIL sUppLIeRs — t

Turkish base oil prices have extended their fall, amid still weak buying interest and lower offers from the Black Sea market.

Buyers remained reluctant to commit to large shipments until prices have stabilised. They are instead continuing to buy smaller volumes to cover their minimum requirements. But some of them are likely facing tighter supplies, after several months of falling imports. There were signs of a pick-up in enquiries from some buyers, although these have failed to translate into deals.

Supplies of SN 150 of Russian origin were available at around $570-580/t cfr Gebze, with SN 500 offered at around $600/t cfr Gebze. Sellers of Russian base oils now have more room to lower their prices without affecting their margins following the cut in the country’s export tax from the start of this year.

Light-grade supplies of European origin were also available, although these were at higher prices. There was an enquiry for a vessel to load a 2,500t cargo from northwest Europe in mid-January to take to Gebze. Another enquiry was for a vessel to load 6,000t of base oils in northwest Europe in late January to take to Gebze and Alexandria.

Turkmen supplies are available. But most such shipments continue to be moved into Iran. Prices for the supplies are anyway too high to compete with Russian

and European product offered into the Turkish market. Price levels for Uzbek supplies continue to be unreflective of market levels and are subsequently not being offered into Turkey. There were no offers of Azeri product in the market.

A major Turkish buyer will be seeking at the end of the month a cargo of around 3,000t of light grades of European origin. Another buyer has covered its requirements and is holding off purchasing spot volumes until the end of March.

Supplies of SN 150 in the ex-tank market were likely available at $650-700/t. Supplies of SN 500 were at a premium of about $25/t to these levels.

Turkey’s only domestic base oils producer kept its prices unchanged. It is offering SN 150 at 1,950 Turkish lira/t ($845/t), SN 500 at TL2,015/t and bright stock at TL2,265/t.

Freight rates to Gebze, turkey $/tRoute 3,000t 5,000t Route 3,000t 5,000t

Black Sea 23-25 16-19 Antwerp 60-65 50-55

Augusta 41-44 30-34 Baltic 82-88 72-77

UAE 85-90 77-80 Mumbai 97-100 92-95

* provided at market close on 15 January by Borachart (www.borachart.com)

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Russian base oil prices have extended their fall, pressured by weak demand and the sustained drop in feedstock prices. Buying interest from China remains muted. Many importers in China were holding back after suffering heavy losses in the previous quarter.

Trading activity in the Baltic market resumed after a week-long public holiday in Russia at the start of the year. But activity remained muted. Base oil stocks held by trading firms in the region were likely low, while availability has also slowed in recent weeks.

Feedstock, tax costs fall furtherBut buyers were still holding off from replenishing their inventories amid expectations prices will fall further. The room for such a price move reflected pressure from lower feedstock costs, the cut in Russia’s export duty and the continuing depreciation of the Russian currency versus the US dollar. The tax is set to fall further next month.

But supplies to the Baltic region already started to fall last month, amid likely production cuts at some plants and a rise in flows to the Black Sea market instead.

The market also faces a likely seasonal rise in demand from the agricultural sector in Russia’s domestic market in the coming months. Building of stocks ahead of maintenance at several plants in early spring will also likely add to the tighter availability of Russian supplies.

No bulk loadings were seen in the region, although buying interest continued from Nigeria. There was an enquiry for a vessel to load as much as 8,000t from the Baltic and northwest European markets in late January to take to Nigeria. Several large shipments from the Baltic market reached Nigeria in first-half January.

The focus of activity was instead on flexibags, as buyers sought to manage their inventories carefully.

Baltic sea Group I $/t

Low High ±

SN 150 fob 490.00 520.00 -40.00

SN 500 fob 500.00 530.00 -40.00

Black sea Group I $/t

Low High ±

SN 150 fob 500.00 530.00 -30.00

SN 500 fob 540.00 570.00 -30.00

Russian base oils, lubes rail/river exports ‘000t

dec nov ± dec nov ±

Rail

overland 36.26 37.38 -1.12 Baltic 14.02 25.50 -11.48

Afganistan 0.00 0.00 +0.00 Kaliningrad 5.51 2.86 +2.65

Armenia 0.00 0.00 +0.00 Liepaja 4.53 7.78 -3.25

Azerbaijan 0.95 0.88 +0.07 Riga 2.72 10.90 -8.18

Belarus 1.51 1.78 -0.27 Ventspils 0.00 0.00 +0.00

China 8.51 11.30 -2.79 St.Petersburg 1.26 3.96 -2.70

Hungary 0.00 1.01 -1.01

North Korea 0.00 0.00 +0.00 Black sea 13.15 2.94 +10.21

Finland 1.48 1.22 +0.26 Eisk 0.00 0.00 +0.00

Kazakhstan 4.82 6.98 -2.16 Feodosiya 0.00 0.00 +0.00

Kyrgyzstan 0.75 0.56 +0.19 Kavkaz 8.48 0.06 +8.42

Latvia 0.12 0.48 -0.36 Novorossiysk 4.67 2.88 +1.79

Lithuania 0.24 0.29 -0.05 Reny 0.00 0.00 +0.00

Moldova 0.46 0.11 +0.35 Odessa 0.00 0.00 +0.00

Mongolia 0.44 0.39 +0.05 Azov 0.00 0.00 +0.00

Romania 1.51 2.12 -0.61

Poland 1.01 0.53 +0.48 River

Slovakia 0.00 0.00 +0.00 Volgograd 0.00 4.25 -4.25

Tajikistan 1.26 1.11 +0.15

Turkmenistan 0.24 0.72 -0.48 Far east

Ukraine 12.24 7.28 +4.96 Nakhodka 0.25 0.35 -0.10

Uzbekistan 0.72 0.62 +0.10

total Russia rail, river exports 63.65 70.45 -6.80

naushki Group I $/t

Low High ±

SN 150 cpt 320.00 350.00 -50.00

SN 500 cpt 320.00 350.00 -50.00

RUssIA And FsU

Russian base oil, lubes rail/river exports by supplier ‘000t

dec nov ± dec nov ±

Volgograd 19.52 12.52 +7.00 Yaroslavl 2.76 5.95 -3.19

by rail 19.52 8.27 +11.25 Ufa 1.74 3.18 -1.44

by river 0.00 4.25 -4.25 Orgkhim 2.56 1.35 +1.21

N.Novgorod 2.42 3.82 -1.40 Obninsk 1.63 1.32 +0.31

Perm 5.93 3.71 +2.22 Sofrino 1.45 1.77 -0.32

Novokuibyshevsk 5.30 10.43 -5.13 Orenburg 0.00 0.00 +0.00

Angarsk 8.86 11.08 -2.22 Other 3.50 5.83 -2.33

Omsk 7.98 9.49 -1.51

total 63.65 70.45 -6.80

Russian rail exports via Baltic/Black sea ’000 t

0

25

50

75

100

125

Nov 13 Mar 14 Jul 14 Nov 14

Total Baltic Sea Black Sea

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RUssIA And FsU

wide bid-offer spread hampers activityBut the wide price spread between buying and selling ideas on a cpt Posin basis continued to hamper activity. Some buyers were targeting prices at $420-450/t cpt Posin for SN 150 and SN 500. Suppliers’ offers were at around $460-500/t cpt Posin.

Rosneft sold through its recent tender for January-loading supplies 1,200t of SN 400 and 660t of bright stock originating from the Yaroslavl refinery at $460/t and $470/t cpt Posin respectively.

The company offered through a new tender on 15 January up to 3,900t of supplies from the Yaroslavl refinery and 7,500t of base oils from its Novokuibyshevsk plant. The supplies are scheduled for late January and early February loading.

naftan cuts pricesNaftan’s Belarus refinery cut its prices for SN 150 by €79/t to €461/t ($544/t) fca refinery. It cut its price of SN 500 by €65/t to €405/t. It cut its Group III 4cst price by €85/t to €555/t. It maintained its price for SN 1200 at €530/t fca refinery. The price cut boosted buying interest in the supplies. The refiner sold 940t of SN 150 and 2,160t of SN 500 at the lowered price levels.

Naftan’s base oils unit was possibly operating at minimum rates. Any increase in run rates was dependent on a recovery in prices.

Ukrainian demand risesPrices for Russian base oils in the Ukrainian market have firmed, supported by stronger demand in country. Ukrainian buyers took 420t of bright stock from Rosneft’s Yaroslavl refinery at $480-490/t cpt Solovey and 300t of SN 400 at around $450/t cpt. Some domestic importers also bought 3,000t of SN 150 from Novokuibyshevsk refinery at $500/t cpt Solovey.

Some light-grade base oils originating from Omsk refinery were likely sold at $480-500/t cpt Solovey.

Price offers for SN 350 and SN 500 originating from Azerbaijan fell sharply, following the plunge in fuel oil prices. Offer levels fell to around $500-510/t and $510-520/t cpt Solovey respectively.

turkish demand begins to stirThere were signs of a pick-up in buying interest from Turkish buyers in the Black Sea market. But the interest has failed to translate into deals.

Turkish base oil imports from Russia slumped in

Russian and Belarusian base oil export duty * $/t

Feb 2015 Jan 2015 dec 2014 nov 2014 oct 2014 sep 2014

54.10 81.60 183.10 209.00 227.50 242.60

Aug 2014 Jul 2014 Jun 2014 may 2014 Apr 2014 mar 2014

256.30 254.20 254.10 248.20 255.40 253.70

* tax paid by producer for base oils export outside of Russia, Belarus, Kazakhstan, Tajikistan and Kyrgyzstan

naftan base oil offers and trades, 09-15 Jan *

Grade volume offered (t)

price, fca (€/t)

price, fca ($/t)

volume sold (t)

SN 150 940 461 544 940

SN 500 2,160 405 478 2,160

SN 1,200 1,000 530 626 -

5cst 2,000 555 655 -

* for imports into EU, Turkey, USA import tax of 3.7% will be charged

— BNTD, traders

Baltic loadings t

port/terminal vessel next port volume B/L date

Riga Wappen Flnsbrg WAF 7,000 24-25 Dec

Svetly Brovig Marin ARA 3,000 20-21 Dec

Svetly Key Breeze ARA 4,000 17-18 Dec

Svetly Antares North Europe 2,000 15 Dec

Svetly Coolwater ARA 2,700 12 Dec

Riga Rio Dauphin WAF 8,200 30 Nov

Svetly Besiktas Galata ARA 3,500 22 Nov

Svetly Golfstraum ARA 6,200 18 Nov

Svetly Amber 1 Hull, UK 4,000 13 Nov

Svetly Orasund Hull, UK 2,700 7 Nov

Riga Mentor WAF 5,000 6 Nov

Liepaja Lexus Hull, UK 3,000 22 Oct

Svetly Besiktas Iceland Antwerp 5,300 21 Oct

Liepaja Ternland Gdansk/Rdam 4,500 15 Oct

Liepaja Deniz A Rotterdam 3,500 mid-Oct

Svetly Ls Eva Antwerp 4,000 14 Oct

Svetly Lotus Rotterdam 3,800 7 Oct

Svetly Donizetti Dordrecht 2,000 4 Oct

Svetly Amber 1 Rotterdam 3,500 20 Sep

November to their lowest level in six years. But Russian supplies will likely be more attractive this year, as the sharp cut in the export duty on the supplies give sellers more room to offer competitive prices.

Price offers were seen at around $520-530/t fob Black Sea for SN 150 and around $540-550/t for SN 500.

A large cargo was likely loaded earlier this month, curbing availability of SN 500. The shipment is likely bound for the Mideast Gulf.

chinese importers slash bid levelsPrices in the Naushki market fell, pressured by sluggish buying activity and lower bids from Chinese importers.

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perm $/t

To Baltic Sea 353

To Black Sea

To Naushki 135

omsk $/t

To Baltic Sea 323

To Black Sea 352

To Naushki 165

Ufa $/t

To Baltic Sea 348

To Black Sea 382

To Naushki 135

volgograd $/t

To Baltic Sea 357

To Black Sea 418

To Naushki 97

FsU key pRodUceRs’ sn 500 pRIce (netBAck) * $/t

* price calculated by subtracting transport costs and taxes between the producer and the fob Baltic, fob Black Sea and cpt Naushki pricing point.

RUssIA And FsU

These buyers remain cautious about committing to large volumes because of expectations that prices will fall further. They are targeting prices at around $300/t cpt Naushki.

Rosneft offered through a new tender more supplies from its Angarsk refinery. It offered up to 360t of each grade, for loading in late January and early February. The company sold only a small volume of base oils in its previous tender at around $350/t cpt Naushki. Some bids for those supplies were possibly lower than $200/t.

The Russian export duty for base oils in February will be cut by $27.50/t to $54.10/t. The cut to an already low export tax will add to the competitiveness of Russian supplies.

The Argus Russian diesel index eased to 30,710 roubles/t ($465/t), pressured by surplus supplies in the domestic market.

Russian domestic base oil supplies ‘000t

supplier nov. 14 ± oct. 14

Rosneft Novokuibyshevsk 11,64 -1,69

Bashneft Ufa 7,53 1,82

Lukoil Perm 6,74 0,45

Gazpromneft Omsk 9,00 0,52

Rosneft Angarsk 4,40 0,99

Lukoil Nizhny Novgorod 7,05 1,09

Gazpromneft/Rosneft Yaroslavl 4,59 -0,23

Lukoil Volgograd 4,38 -0,50

Obninskorgsintez 0,15 -0,35

Orgkhim 2,31 -0,18

Rosa-1 0,78 -0,06

Shaumyan lube plant 0,18 -0,34

Lukoil Tyumen 0,41 -0,11

Sofrino lube plant 0,28 -0,08

Rosneft Ryazan 0,18 -0,05

Experimental plant Neftekhim 0,00 -0,08

Orenburg lube plant 0,02 -0,12

Others 50,78 -7,56

Total 110,42 -6,48

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Group I bulk export prices $/USG $/t


SN 150 fob 1.80 1.96 -0.10 545.00 594.00 -30.50

SN 500 fob 2.07 2.23 -0.15 617.00 665.00 -44.50

Bright stock fob 3.22 3.38 +0.00 947.00 994.00 +0.00

Group II bulk export prices $/USG $/t


N100 fob 1.72 1.88 -0.10 533.00 583.00 -31.00

N200 fob 1.76 1.92 -0.09 537.00 586.00 -27.00

N220 fob 1.76 1.92 -0.09 537.00 586.00 -27.00

N600 fob 1.87 2.03 -0.13 561.00 609.00 -39.00

US base oil prices have extended their fall, as a further slide in crude prices raised expectations of another downwards adjustment to posted prices.

Such expectations dampened already fragile demand, as buyers picked up the volumes needed to cover requirements to maximise their benefit from such a price adjustment. Similar price cuts were already announced this week in Europe and in Asia-Pacific. Growing expectations of such a move in the US follow a fall of more than $12/bl in crude prices (30¢/USG) since the last base oil posted price adjustment.

But producers could seek to hold off such a move because of expectations that a price cut at the start of the year would be unlikely to bolster demand, especially while crude prices remain volatile. They could instead seek to hold off making any such adjustments until the expected start of a seasonal pick-up in demand from early February.

But active price discounts of as much as 20-60¢/USG to postings highlighted the extent of the weak demand and moves to respond to expectations of lower prices in the domestic market. Overseas buyers are asking for even larger discounts from US suppliers in their negotiations for February-loading cargoes.

Domestic Group II N100 price indications surfaced either side of $2.10/USG, with premiums to this level for smaller volumes. The premium of N200-230 to N100 continued to narrow amid oversupply in the US Gulf coast market. The premium of domestic N600 over light grades has slumped during the past half-year and continued to narrow further. It dropped to levels on either side of $2.32/USG, again with stronger premiums for smaller volumes.

US Group II light-grade prices have held below Group I prices since early 2013, reflecting the plentiful supply of

domestic prices $/USG $/t


Group I

SN 150 2.08 2.24 -0.05 630.00 679.00 -15.00

SN 500 2.30 2.46 -0.10 685.00 733.00 -30.00

Bright stock 3.47 3.63 +0.02 1,020.00 1,067.00 +6.00

Group II

N100 2.01 2.17 -0.02 623.00 673.00 -6.00

N200 2.05 2.21 -0.06 625.00 674.00 -18.50

N220 2.05 2.21 -0.06 625.00 674.00 -18.50

N600 2.24 2.40 -0.03 672.00 720.00 -9.00

Group III

4cst 3.18 3.34 -0.12 1,002.00 1,052.00 -38.00

6cst 3.22 3.38 -0.10 1,014.00 1,065.00 -31.50

8cst 3.23 3.39 -0.10 1,017.00 1,068.00 -31.50

naphthenic domestic prices $/USG $/t


Pale oil 60 2.79 2.95 -0.12 827.00 874.00 -35.50

Pale oil 100 3.16 3.32 -0.07 926.00 973.00 -21.00

Pale oil 500 3.03 3.19 -0.05 871.00 916.00 -14.50

Pale oil 2000 3.13 3.29 -0.09 893.00 939.00 -25.50

naphthenic bulk export prices $/USG $/t


Pale oil 60 fob 2.46 2.62 -0.15 729.00 776.00 -44.50

Pale oil 100 fob 2.66 2.82 -0.06 780.00 827.00 -17.00

Pale oil 500 fob 2.71 2.87 -0.07 779.00 825.00 -20.00

Pale oil 2000 fob 2.83 2.99 +0.00 807.00 853.00 +0.00

Us

Us sn 150 domestic premium to heating oil $/USG

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

17 Jan 14 16 May 14 12 Sep 14 16 Jan 15

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the premium-grade product. But the premium of Group I Argus spot prices over Group II has been narrowing during the past two months and narrowed further to around 5-8¢/USG, reflecting the move by lubricant manufacturers away from the grade.

But bright stock supplies have tightened since refiners began cutting production in October. The tighter supplies have offered price support for the grade, boosting prices in the spot market back up to levels just below $4.00/USG in the Brownsville, Texas market. The stronger price level has prompted persistent moves by Mexican buyers to look to lower priced supplies from Europe. But finalising a deal for bright stock only is difficult.

Prices for Group III have extended their fall, amid rising global supplies of premium-grade base oils. Besides the start-up of the SK/Repsol 630,000 t/yr Group III base oils plant in Cartagena, Spain last September, ExxonMobil’s expanded Group II+ production at its Baytown plant is to start this quarter.

Indian demand shows signs of firmingThere was renewed interest in moving cargoes of surplus US Group I and Group II supplies to overseas outlets. US Group I cargoes of SN 150 were offered as low as $1.65/USG fob.

Cargo offers from the US Gulf coast to India resurfaced last week and gained traction this week. Price offers at levels below $1.80/USG fob for N100, N220 and N600 attracted more serious buying interest than in previous weeks. Tighter availability in Asia-Pacific in March because of maintenance is possibly spurring demand for alternative supplies.

But the market price volatility has complicated the shipment of cargoes from the US to India. A vessel originally scheduled to load a cargo in December for India is now loading two cargoes totalling 16,000t of Group II from the US Gulf coast. It is scheduled to load the second cargo around now.

Group I moves to Latin AmericaThere were several vessel enquiries to move Group I cargoes ranging between 1,750t and 6,600t in size from various European ports to take to Colombia and Brazil.

A major trading company that likely won Venezuelan state-owned PdV’s latest tender fixed its own time-chartered vessel to move 15,000t of Group I base oils from Houston to Punta Cardon. The cargo likely loaded around 12-13 January. It is expected to reach Punta Cardon around

Us

Us sn 500 forward premium to heating oil

$/USG $/t

midpoint ± midpoint ±

Feb 2015 0.36 -0.07 107.45 -20.40

Mar 2015 0.39 -0.06 115.25 -19.80

Apr 2015 0.40 -0.07 120.25 -20.00

2Q 2015 0.40 -0.07 119.20 -20.85

3Q 2015 0.35 -0.08 104.30 -23.85The premium shows the implied forward-curve profitability of fob US export SN 500 relative to Nymex heating oil futures. Refer to www.argusmedia.com for methodology

Us sn 500 forward prices $/USG $/t


Feb 2015 2.13 2.18 -0.15 633.25 648.15 -44.70

Mar 2015 2.10 2.15 -0.15 625.45 640.35 -45.35

Apr 2015 2.08 2.13 -0.15 620.50 635.40 -45.10

2Q 2015 2.09 2.14 -0.15 621.95 636.85 -44.75

3Q 2015 2.13 2.18 -0.14 635.00 649.90 -42.90The price shows the implied forward-curve base oil price required to maintain its existing profit margin relative to Nymex heating oil futures. Refer to www.argusmedia.com for methodology

crude $/USG $/bl

± ±

Nymex WTI crude front month 1.10 -0.06 46.25 -2.54

SN 500 premium to WTI 1.05 -0.09 44.09 -3.73

Argus Sour Crude Index (ASCI™) 1.02 -0.06 42.79 -2.66

SN 500 premium to ASCI™ 1.13 -0.09 47.55 -3.61

oil products $/USG $/bl

± ±

NYH heating oil barge 1.58 -0.09 66.25 -3.86

Low sulphur VGO 0.5% cargo 1.35 -0.07 56.75 -3.04

High sulphur VGO 2% cargo 1.30 -0.05 54.75 -2.04

USGC 10ppm diesel 62 cargo 1.51 -0.05 63.30 -2.21

Oil products premiums

Heating oil premium to WTI 0.48 -0.03 20.00 -1.32

Heating oil premium to VGO 2% 0.28 -0.04 11.50 -1.82

SN 500 premium to heating oil 0.57 -0.06 24.10 -2.41

SN 500 premium to VGO 2% 0.85 -0.10 35.59 -4.23

Us sn 500 premium to vGo 2% $/USG

0.40

0.60

0.80

1.00

1.20

1.40

1.60

17 Jan 14 16 May 14 12 Sep 14 16 Jan 15

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Us

nApHtHenIc BAse oILs

vessel enquiries: Us t


Lake Charles India Jan/ely Feb 10,000-15,000

W. Med Colombia prompt Jan 1,750

Rotterdam San Juan 2H Jan 1,500-2,000

Livorno/Antwerp Santos/Rio 18-25 Jan 6,600 + 2,500

W. Med Houston prompt Jan 4,000-5,000


Vessel fixtures: US

vessel Loading port next port B/L date volume, t Freight, $/t

Furuholmen Houston Punta Cardon 12-13 Jan 15,000 ---

Fairchem Mustang USG Durban 2H Jan 8,800 ---

Sichem Aneline Malacca Santos/Durban end-Dec 7,500 150s


US naphthenic base oil prices fell more steeply than paraffinic base oil prices, as further posted price cuts surfaced.

Calumet said on 13 January that it will cut the price of all its naphthenic grades by 20¢/USG with effect from 22 January. The move came after Ergon cut its domestic prices by 15-25¢/USG on 13 January. Other naphthenic producers are currently evaluating their positions.

Blenders and international buyers also noticed considerable volume discounts from some producers, indicating growing supply length in the market. The high price levels have also eroded their competitiveness versus competing light-grade Group II prices. The premium of pale oil 60 over Group II N100 rose earlier this month to its highest level since last May.

But any supply overhang could ease in February. Cross Oil and San Joaquin Refining will carry out turnarounds at their naphthenic refineries at the end of next month. San Joaquin Refining will shut down its entire refinery for the last two weeks in February for a planned turnaround. It is expected to build its inventories ahead of the shutdown.

The premium of domestic pale oil 60 over four-week average of Light Louisiana Sweet crude remained firm, even after slipping by more than $2.00/bl to just below $68/bl.

20 January.European bright stock is still being offered and sold

into Mexico at around $3.40-3.45/USG delivered. For Mexican buyers, the price level is lower than purchasing bright stock from the US.

More majors cut finished lubricant pricesMore producers of finished lubricants announced price cuts for their products. Phillips 66 will cut the prices for its finished lubricants by 4.5pc with effect from 2 February. ExxonMobil and Shell will both cut prices for their lubricants by 3.5pc. Exxon’s price cuts take effect on 2 February. Shell’s price cuts take effect from 19 January. Chevron was the first major blender to announce price cuts for finished lubricants in late December. Chevron’s 3.5pc price cut will take effect on 6 February.

The reductions contrast with the more than 40pc fall in base oil prices during the second half of 2014.

margins rise on falling crude, vGo The premium of SN 150 over four-week average vacuum gasoil (VGO) held firm at $0.75/USG for the second consecutive week. The premium of N100 over VGO nudged up to $0.68/USG, remaining unusually firm for the time of year.

The premium of base oil prices to ultra-low-sulphur diesel has also remained firm, at their highest levels since last summer. The relative strength partly reflects the impact of the warmer winter, which has curbed demand for heating oil. Refineries have also been running at high rates as they take advantage of lower priced crude. The result is an oversupply of distillates and weaker prices, making it increasingly lucrative to produce base oils instead.

Base oil prices have tracked lower crude and VGO prices relatively closely in recent months, reflecting the oversupply and increased capacity of the product. The drop in base oil prices was more delayed in previous downwards crude movements. Markets linked to base oils, such as polyalphaolefins or petroleum wax, have shown remarkable price steadiness compared with base oils amid more balanced supply-demand fundamentals.

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Group II *

calumet shreveport effective from $/USG ±

80 22 Dec 14 2.69 -0.50

100 22 Dec 14 2.56 -0.50

150 22 Dec 14 2.99 -0.50

325 22 Dec 14 3.45 -0.55

Group II+ *

sk Lubricants Gulf coast phillips 66 Gulf coast

effective from $/USG ± effective

from $/USG ±

50/60 16 Dec 14 3.67 -0.40

70/80 18 Dec 14 4.24 -0.40 16 Dec 14 3.77 -0.40

Group II+ *

exxonmobil Gulf coast effective from $/USG ±

110/130 22 Dec 14 2.79 -0.45

190 22 Dec 14 2.59 -0.50

Group III *


effective from $/USG ± effective

from $/USG ±

4cst 18 Dec 14 4.51 -0.40 16 Dec 14 3.98 -0.40

6cst 18 Dec 14 4.51 -0.40

8cst 18 Dec 14 4.54 -0.40 16 Dec 14 4.08 -0.40

Us posted pRIces $/USG

*the ± column shows the price difference between the current and previous posted price

Group I *

exxonmobil Gulf coast HollyFrontier Paulsboro Refining east coast calumet shreveporteffective

from $/USG ± effective from $/USG ± effective

from $/USG ± effective from $/USG ±

70/75 17 Dec 14 2.59 -0.45

100 22 Dec 14 2.50 -0.45 17 Dec 14 2.59 -0.45 26 Dec 14 2.75 -0.45

150 22 Dec 14 2.55 -0.40 17 Dec 14 2.77 -0.45 26 Dec 14 2.70 -0.40

250 17 Dec 14 2.68 -0.45

300/350 22 Dec 14 2.57 -0.45

500 17 Dec 14 2.93 -0.45 26 Dec 14 2.79 -0.45

600/650 22 Dec 14 2.65 -0.45 22 Dec 14 3.05 -0.45

700 26 Dec 14 2.82 -0.45

Bright stock 22 Dec 14 3.91 -0.35 17 Dec 14 4.12 -0.35 26 Dec 14 4.06 -0.35 22 Dec 14 4.12 -0.35

Group II *

phillips 66 Gulf coast chevron Gulf coast motiva Gulf coast FHR Gulf coasteffective

from $/USG ± effective from $/USG ± effective

from $/USG ± effective from $/USG ±

70 16 Dec 14 2.55 -0.60 18 Dec 14 2.63 -0.50

75/80 16 Dec 14 2.55 -0.60 18 Dec 14 2.63 -0.50

100/120 16 Dec 14 2.45 -0.60 17 Dec 14 2.45 -0.50 16 Dec 14 2.45 -0.50 18 Dec 14 2.45 -0.50

200/220 16 Dec 14 2.60 -0.65 17 Dec 14 2.60 -0.55 16 Dec 14 2.60 -0.55 18 Dec 14 2.60 -0.55

600 16 Dec 14 2.80 -0.65 17 Dec 14 2.80 -0.55 16 Dec 14 2.80 -0.55 18 Dec 14 2.80 -0.55

Us domestic sn 150 vs posted prices $/UsG

2.00

2.50

3.00

3.50

4.00

4.50

10 Jan 14 16 May 14 12 Sep 14 16 Jan 15

US SN 150 ExxonMobil HollyFrontierPaulsboro

Us domestic n600 vs posted prices $/UsG

2.00

3.00

4.00

5.00

6.00

10 Jan 14 16 May 14 12 Sep 14 16 Jan 15

US N600 Phillips 66 Chevron Motiva FHR

of 28



Us posted pRIces $/t

*the ± column shows the price difference between the current and previous posted price. The $/t price is converted from the $/USG price.Refer to www.argusmedia.com for methodology with the gallons-to-tonnes conversion factors.

Group I *

exxonmobil Gulf coast HollyFrontier Paulsboro Refining east coast calumet shreveporteffective

from $/t ± effective from $/t ± effective

from $/t ± effective from $/t ±

70/75 17 Dec ‘14 802.90 -139.50

100 22 Dec ‘14 770.00 -138.60 17 Dec ‘14 797.72 -138.60 26 Dec ‘14 844.25 -138.15

150 22 Dec ‘14 782.85 -122.80 17 Dec ‘14 850.39 -138.15 26 Dec ‘14 815.40 -120.80

250 17 Dec ‘14 814.72 -136.80

300/350 22 Dec ‘14 778.71 -136.35

500 17 Dec ‘14 884.86 -135.90 26 Dec ‘14 837.00 -135.00

600/650 22 Dec ‘14 789.70 -134.10 22 Dec ‘14 908.90 -134.10

700 26 Dec ‘14 834.72 -133.20

Bright stock 22 Dec ‘14 1,161.27 -103.95 17 Dec ‘14 1,223.64 -103.95 26 Dec ‘14 1,201.76 -103.60 22 Dec ‘14 1,222.77 -103.88

Group II *

phillips 66 Gulf coast chevron Gulf coast motiva Gulf coast FHR Gulf coasteffective

from $/t ± effective from $/t ± effective

from $/t ± effective from $/t ±

70 16 Dec ‘14 790.50 -186.00 18 Dec ‘14 815.30 -155.00

75/80 16 Dec ‘14 780.30 -183.60 18 Dec ‘14 804.78 -153.00

100/120 16 Dec ‘14 757.66 -185.55 17 Dec ‘14 757.05 -154.50 16 Dec ‘14 759.50 -155.00 18 Dec ‘14 757.66 -154.63

200/220 16 Dec ‘14 792.35 -198.09 17 Dec ‘14 793.00 -167.75 16 Dec ‘14 793.00 -167.75 18 Dec ‘14 792.35 -167.61

600 16 Dec ‘14 844.20 -195.98 17 Dec ‘14 844.20 -165.83 16 Dec ‘14 845.60 -166.10 18 Dec ‘14 844.20 -165.83

Group II *

calumet shreveport effective from $/t ±

80 22 Dec ‘14 830.13 -154.30

100 22 Dec ‘14 786.59 -153.63

150 22 Dec ‘14 916.02 -153.18

325 22 Dec ‘14 1,051.11 -167.57

Group II+ *


effective from $/t ± effective

from $/t ±

50/60 16 Dec ‘14 1,183.58 -129.00

70/80 18 Dec ‘14 1,335.60 -126.00 16 Dec ‘14 1,206.40 -128.00

Group II+ *

exxonmobil Gulf coast effective from $/t ±

110/130 22 Dec ‘14 873.27 -140.85

190 22 Dec ‘14 805.49 -155.50

Group III *


effective from $/t ± effective

from $/t ±

4cst 18 Dec ‘14 1,420.65 -126.00 16 Dec ‘14 1,263.65 -127.00

6cst 18 Dec ‘14 1,420.65 -126.00

8cst 18 Dec ‘14 1,430.10 -126.00 16 Dec ‘14 1,277.04 -125.20

Us base oil production, sales ’000 bl

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Oct 13 Feb 14 Jun 14 Oct 14

Production Sales — EIA

Us base oil exports, imports ’000 bl

-2,000

-1,000

0

1,000

2,000

3,000

Oct 13 Feb 14 Jun 14 Oct 14

Exports Imports Net imports — EIA

of 28



mARket news And AnALysIs

1India’s december base oil imports hold steady2India’s base oil imports held firm in december, supported by steady shipments from south korea that countered a sharp slowdown in flows from the Us.

Imports totalled 187,695t in December, port data showed. The volume was 5pc higher than the same month a year earlier. Total imports in 2014 rose by 20pc from a year earlier to a record 2.45mn t on the back of a surge in flows from South Korea and the US.

But imports in November and December were lower than earlier months. Such deliveries had exceeded the 200,000 t/month level seven times last year, mostly because of a surge in shipments from the US. The relative slowdown in imports at the end of last year reflected moves by buyers to cut back inventories and supplies involving long voyage times, as they shunned exposure to the extreme price volatility during the final quarter of 2014.

Imports from South Korea were 113,885t in December. The volume was more than 5pc higher than the same month a year earlier and steady from the previous month. Record-high imports of 1.38mn t in 2014 were 34pc higher than the previous year.

Imports held firm in December as buyers increasingly limited their requirements as they sought to cut their inventories. They covered such needs through term cargoes from key suppliers in South Korea rather than through spot shipments.

Buyers also preferred shipments with a shorter delivery time. Shipments from South Korea to India typically take about 22 days. The voyage time for supplies from the US to India is about 42 days.

The longer voyage time for shipments from US slashed buying interest in such cargoes. Imports from the US fell

to 8,990t in December, down from more than 42,000t the same month a year earlier and the lowest volume since September.

The slowdown reflected buyers’ concern that market prices will fall significantly lower than the prices they bought at by the time such cargoes reached India. Such a scenario already took place with the delivery of supplies in October. The shipments had been bought at much higher price levels in August.

Total imports of 257,490t from the US in 2014 were 6pc lower than the previous year. The drop in imports reflected the sharp fall in shipments in the last few months of last year. But the volume remained unusually high compared with recent years, reflecting the growing supply overhang in the US and the increasingly frequent flow of shipments from this market to India.

Base oil imports from Russia fell for a third straight month in December to just 800t. The volume was the lowest in 19 months and compared with average shipments of more than 8,000 t/month last year. The slowdown reflected buyers’ concern that prices would fall further. It also reflected waning demand for Group I heavy-grade supplies, as buyers increasingly switched to using competitively priced Group II base oils.

Total imports of 96,440t from Russia in 2014 were more than double year-earlier volumes of less than 42,000t. The surge in supplies reflected firm demand in the first half of the year, especially when prices were more competitive compared with supplies from Iran.

Indian base oil imports from UAE and Iran combined came to 7,450t in December. The volume was down from more than 10,700t the same month a year earlier and from more than 11,000t in November. The slowdown similarly reflected waning demand for Group I base oils. But import volumes have recovered in the last few months of the year, reflecting the attraction of securing supplies from logistically closer sources.

Imports from Singapore remained firm at 21,510t in December. Total imports of 232,120t in 2014 were more than 60,000t higher than the previous year. The steady rise in imports came even ahead of the start-up of new production capacity in Singapore at the start of this year.

India’s base oil imports from Spain surged to 16,740t in December. The volume exceeded total imports from Spain over the previous three years combined. The supplies were mostly premium quality light-grade base oils. The surge in such shipments followed the start-up of SK Lubricants and Repsol’s joint-venture Group III base oils plant in Spain last September.

125

150

175

200

225

250

275

Jan May Sep|

Dec

2012 2013 2014 — Port data

Indian base oil imports ’000 t

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1turkey’s november base oil imports fall2turkey’s base oil imports fell in november for a fifth month out of six, as buyers minimised deliveries to limit their exposure to any further drop in prices.

Imports fell to 45,330t in November, government data showed. The volume was 27pc lower than the same month a year earlier. Total imports of 497,185t in the first 11 months of the year were 20pc lower than the same period last year.

Imports have been sliding throughout the year amid tighter regulations on such shipments. But the slowdown in recent months has been exacerbated by the sharp fall in base oil prices. With no way to cover their exposure to such a price drop, buyers have sought to minimise inventories and cut back purchases.

They have also tapped the ex-tank market to cover immediate requirements. But production and sales from Turkey’s only base oils unit have remained unusually low. Production of 11,000t in October was barely a third of the plant’s capacity. Base oil sales from the plant came to just 9,000t.

Supplies from Greece and Italy continued to hold firm, as buyers secured on-specification supplies at steep discounts to market prices. Regional refiners also sought to clear their own inventories before the end of the year and in response to slumping prices.

Imports from Italy surged to 16,345t in November. The volume was up from 9,550t the previous month and the highest level since December 2013.

Imports from Greece rose to 11,695t in November, up from 8,230t the previous month. Total imports of 130,385t from Greece in the first 11 months of the year were 48pc higher than the same period last year. The surge in supplies reflected the impact of the imposition of a 3.7pc import tax on supplies from Russia at the start of last year. The higher cost of the Russian supplies boosted the competitiveness of supplies from Greece, which also benefited from their proximity to Turkey, cutting freight costs.

But Turkish base oil imports from Russia fell to just 2,960t in November. The volume was the lowest level since August 2008. The slump in shipments reflected their less competitive prices and extended a trend that began at the start of the year. Total imports of 97,704t from Russia in the first 11 months of the year were down from more than 160,000t the same time a year earlier.

Imports from the Netherlands rose to 9,245t in November. The volume was the highest in more than six years. Many European refiners were offering surplus supplies at attractive prices in last year’s final quarter in a bid to clear high stocks.

1china raises oil product consumption taxes again2china has raised consumption taxes on oil products for the third time in six weeks amid a continued fall in global crude prices.

Taxes will rise by 9pc on most products, effective tomorrow, the finance ministry and state taxation administration said. The tax increase was announced in tandem with a cut in motor fuel prices, lessening its impact on consumers.

The latest tax rise is smaller than the previous increases on 29 November and 13 December that raised consumption taxes by a combined 37-40pc. Consumption taxes had previously been unchanged since they were first imposed in 2009.

The consumption tax on gasoline, naphtha, solvents and lubricants will increase by 0.12 yuan/litre (2¢/l) to Yn1.52/l, while the tax on diesel, jet-kerosine and fuel oil will increase by Yn0.1/l to Yn1.2/l. But the tax on jet-kerosine will not be imposed, as previously, to protect domestic airlines.

The tax increase is designed to manage consumption, reduce oil demand, cut air pollution and speed reforms in the way energy is produced and consumed in China, the government agencies said.

But the increases are robbing Chinese consumers of some of the benefits of lower prices. Top regulator the NDRC on 12 January reduced its price ceilings for gasoline by Yn180/t and for diesel by Yn230/t, reflecting falling crude values. This is well below the price cuts of Yn395/t and Yn380/t respectively that would have been implemented under the NDRC’s fuel pricing mechanism if consumption taxes had not risen.

The NDRC would have reduced gasoline and diesel prices by an extra Yn725/t and Yn460/t respectively in November and December, without the previous consumption tax hikes.

China’s consumption taxes are paid by refiners, which then pass the costs on to consumers. The total tax burden comprises VAT, consumption tax and other taxes. Tax hikes have led to a rise in inflows of smuggled diesel and increas-ing supply of private-sector blended gasoline, which has undermined demand for fuel produced by local refineries.

turkish base oil imports ’000 t

30

40

50

60

70

80

90

100

Jan May Sep|

Dec

2012 2013 2014 — TurkStat

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1china’s december car sales rise2china’s car sales rose in december for a 22nd straight month, while Japanese auto sales rose for the first time in six months. Indian car sales got a lift ahead of the expiry of tax breaks.

Chinese car sales rose by 16pc in December to 2.06mn, according to the country’s association of automobile manufacturers. The increase outpaced the 10pc rise in sales in 2014 to 19.7mn. The annual increase also slowed from a 15.7pc rise in sales in 2013.

Total automobile sales rose by 12.9pc in December to 2.41mn. Total sales in 2014 rose by 6.9pc to 23.49mn. The increase slowed from a 13.9pc rise in sales in 2013.

Sales of sedan cars rose by 7.4pc in December to 1.26mn. Total sales in 2014 rose by 3.1pc to 12.38mn. Sales of sports utility vehicles (SUVs) rose by 56pc in December to 492,000. The increase outpaced the 36pc rise in sales in 2014 to 4.08mn.

China-branded cars accounted for 41.2pc of total sales in December, down by 2.1 percentage points from the same month a year earlier.

Japan’s automobile sales rose in December for the first time in six months. Sales rose by 2.1pc to 431,918. Sales had slumped since April following an increase in the country’s consumption tax that month. Total sales rose by 3.5pc in 2014 from the previous year to 5.56mn.

India’s car sales rose in December for a second month, as buyers brought forward their purchases ahead of the end of tax breaks on car sales. Total car sales rose by 15pc in December to 152,740, according to the Society of Indian Automobile Manufacturers. The lower excise duty on car sales was introduced last February in a bid to help revive the industry. It was then extended in June until the end of last year.

Fuel prices in India have also fallen, although their impact has been partially countered by the removal of

government controls on diesel prices since October. Even with the benefit of last year’s lower excise duty

to spur sales, the recovery in demand remained weak. Total sales of 1.85mn in 2014 were just 2pc higher than the previous year. But demand remained far lower than sales of more than 2mn in 2012.

Taiwan car sales rose by 7pc in December to 41,799. Total sales of 423,829 in 2014 rose by 12pc from the previous year to the highest level since 2005.

Australian automobile sales nudged higher in December for the first time in three months, supported by a sustained rise in SUV sales. Total auto sales rose by 0.1pc in December to 96,809. Passenger car sales fell by 5.5pc in December to 45,051, while SUV sales climbed by 7.4pc to 30,666.

The sustained strength of SUV sales pushed their share of auto sales in 2014 to 31.7pc of the total, up from 29.4pc in 2013. By contrast, passenger cars accounted for 47.8pc of total auto sales last year, down from 49.8pc the previous year.

1strike at colas dunkirk refinery hits output2A strike in protest against the loss of jobs at colas’ speciality products refinery in dunkirk, France, is disrupting production and loadings of base oils.

Colas said that it is unclear when the strike, which started on 14 January, will end and production and loadings resume.

The company and French trade union federation CGT will meet tomorrow to negotiate the loss of jobs resulting from the planned discontinuation of base oils and paraffin production.

After several rounds of strikes and negotiations, Colas proposed to maintain 109 of the 275 jobs but the CGT is pushing for another 11 positions to be kept.

Colas announced plans to discontinue its base oils and paraffin production after forecasting an operating loss between €45mn-50mn ($52mn-58mn)for 2014. The company will continue production until at least March to fulfil its term contracts.

Colas acquired the Dunkirk site from ExxonMobil and Total in July 2010.As part of the acquisition, the refinery benefited from a processing contract with Total that covered 40pc of its production until the end of 2012. In 2013, Colas produced 294,000t of bitumen, 258,000t of base oils, 304,000t of fuel oils and 48,000t of paraffin.

china/Japan/India car sales ’000

0

500

1,000

1,500

2,000

2,500

Jun 13 Dec 13 Jun 14 Dec 14

China Japan India

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Upcoming / recent base oil plant maintenance / shutdowns / closures

Refiner Location timing capacity capacity affected cause

Shell Pernis, Netherlands Late 2015 370,000 t/yr All Closure

Total Gonfreville, France Oct 2015 500,000t/yr 250,000t/yr Closure

S-Oil Onsan, South Korea 2H 2015 41,000 b/d 13,000 b/d Maintenance

S-Oil Onsan, South Korea 2H 2015 41,000 b/d 28,000 b/d Maintenance

JX Nippon Wakayama, Japan Jun 2015 176,000 t/yr NA Maintenance

JX Nippon Mizushima, Japan May 2015 225,000 t/yr All Maintenance

Rosneft Angarsk, Russia May 2015 for 1 month 250,000 t/yr NA Maintenance

Neste Porvoo, Finland April 2015 for 8 weeks 250,000 t/yr NA Maintenance

Idemitsu Chiba, Japan Mid-Apr 2015 for 60-80 days 305,000 t/yr All Maintenance

Rosneft Novokuibyshevsk, Russia April 2015 350,000 t/yr All Maintenance

Gazpromneft Omsk, Russia March - April 2015 240,000t/yr All Maintenance

Gazpromneft/Rosneft Yaroslavl, Russia March - April 2015 250,000 t/yr All Maintenance

SK Lubricants Ulsan, South Korea March 2015 for 4 weeks 38,500 b/d All Maintenance

SK Lubricants Ulsan, South Korea March 2015 for 4 weeks 10,000 b/d All Maintenance

Formosa Mailiao, Taiwan March 2015 for 40 days 520,000 t/yr NA Maintenance

Calumet Princeton, Louisiana, US 1Q 2015 6,900 b/d All Maintenance

San Joaquin Ref Bakersfield, California, US 2H Feb 2015 8,100 b/d All Maintenance

Motiva Port Arthur, US 2015 2,050,000 t/yr NA Maintenance

HollyFrontier Tulsa, Oklahoma, US End 2014 9,500 b/d NA Maintenance

Petrochina Fushun, China From Dec 2014 150,000 t/yr All Maintenance/run-cuts

Sinopec Jinan, China Dec 2014 for 1-2 months 150,000 t/yr All Maintenance

Rosneft Angarsk, Russia From early Dec 2014 250,000 t/yr NA Lower run-rates

Lukoil Nizhniy Novgorod, Russia Nov 2014 290,000 t/yr NA Lower run-rates

Lukoil Perm, Russia Nov 2014 460,000 t/yr NA Lower run-rates

Lukoil Volgograd, Russia Nov 2014 715,000 t/yr NA Lower run-rates

Cepsa San Roque/ Algeceiras, Spain Nov 2014 for 3 weeks 265,000 t/yr All Maintenance

Sinopec Jingmen, China 15 Nov 2014 for 1-2 months 300,000 t/yr 100,000t/yr Maintenance

Sinopec Yanshan, China Early-Nov to mid-Nov 2014 250,000t/yr All APEC Meeting

ExxonMobil Singapore 6 Oct 2014 for 1-2 months 1,275,000 t/yr NA Maintenance

CNOOC Huizhou, China 6 Oct-20 Dec 2014 400,000 t/yr All Maintenance

Lyondell Basell Houston, Texas, US Early-Oct to early-Nov 2014 3,600 b/d All Maintenance

CPC-Shell Kaohsiung, Taiwan 30 Sep 2014 280,000 t/yr All Closure

Rosneft Angarsk, Russia 7 Sep to 15 Oct 2014 250,000 t/yr All Maintenance

PetroChina Karamay, China Early-Sep to early-Oct 2014 400,000 t/yr All Maintenance

Pertamina Cilacap, Indonesia End-Sep to mid-Nov 2014 440,000t/yr NA Maintenance

Thai Lube Sriracha, Thailand End-Sep 2014 for 1 week 275,000 t/yr NA Maintenance

Qisheng Industrial Shandong, China Sep to early-Nov 2014 70,000 t/yr All Maintenance

Panjin Northern Asphalt Liaoning, China Sep 2014 400,000 t/yr All Maintenance

Gazpromneft Omsk, Russia Sep to mid-Nov 2014 240,000 t/yr Impacts light grades Upgrade

Sinopec Gaoqiao, China 1 Sep 2014 to 2H Nov 2014 600,000 t/yr 300,000 Maintenance

Sinopec Gaoqiao, China 1 Sep 2014 to early-Nov 2014 600,000 t/yr 300,000 Maintenance

Naftan Novopolotsk, Belarus 15 Aug 2014 for 1 month 200,000 t/yr NA CDU shutdown

Safor Durban, South Africa From 31 Jul 2014 155,000t/yr All Closure

Sinopec Jingmen, China Mid-Jul to Sep 2014 300,000 t/yr 100,000t/yr Maintenance

Petrogal Porto, Portugal Mid-Jul for 1 month 185,000 t/yr NA Maintenance

PetroChina Daqing Petrochemical, China Jun 2014 for 20 days 450,000 t/yr 200,000t/yr Maintenance

Excel Paralubes Westlake, Louisiana, US 25 Jun 2014 till 1H Aug 2014 30,000 b/d All Maintenance

JX Nippon Mizushima, Japan 20 May to 16 Aug 2014 225,000 t/yr All Maintenance

Every effort has been made to verify information directly with appropriate company sources. Some information has been obtained from usually reliable sources, but cannot be officially confirmed with the refinery concerned. The list will be updated when new information becomes available.

mAIntenAnce And sHUtdowns

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sep 2014 Industrial overview Lube/base oils overview

Automobile sales

Industrial growth production sales Import export

’000 Mom% Yoy% Yoy% ’000t Mom% Yoy% ’000t Mom% Yoy% ’000t Mom% Yoy% ’000t Mom% Yoy%

China 1,696 +16 +6 +8.00 467.2 -4 -11 756.2† +7 +1 274.4 +34 +28 4.1 +140 +209

Japan* 519 +56 -1 +0.80 180.0 +12 +5 114.5 +9 -5 4.4 -35 -30 56.1 +12 -9

Europe 1,236 +85 +6 +0.40

US* 1,246 -21 +9 +4.30 811.0 -6 +6 562.7 -2 +7 131.3 -27 +62 366.6 +12 +18

France 151 +80 +6 -0.10 50.7 +56 +1

Germany 260 +22 +5 +0.10 108.5 -8 +135 85.0 +19 -7 55.0 +9 +31 29.6 +25 +122

Italy 110 +108 +3 -2.90 36.0 +64 +0

Russia 197 +15 -20 +2.80 90.3 -20 -13

Spain 57 +26 +26 +1.60 33.3 +49 +7

Turkey 67 +11 -2 +2.50 5.3 -72 +21 43.0† -39 -39 37.7 -27 -43 0.0 0 0

UK 426 +490 +6 +2.10 34.0 +2 +55 27.0 -18 -27

Australia* 95 +8 +3 0.0 0 0 24.5 +2 +3 43.4 +125 +24 48.6 +46 +51

India 155 +1 -1 +2.50 75.2 +4 +19 257.0 -21 +35 200.5 +14 +19

Singapore -1.20 41.2‡ -31 -36 158.9‡ -37 -8

South Korea +1.90 52.1 +123 +157 346.0 +24 +26

Taiwan* 35 +50 +20 +10.30 20.9^ -25 -9 9.9 -41 -4 3.6 -11 -28 39.3 -29 +129

Thailand* 69 +0 -27 -3.92 40.9 -18 -25 33.4† +13 +1 16.8 +24 -13 17.6 -41 -45

Argentina* 60 +18 -29 -1.70 6.0 -13 -50 6.8 -4 +112 0.0 0 0

Brazil* 296 +9 -4 -2.10 56.8 +60 +50 92.6† -13 -15 49.2 -33 -34 13.3 +346 +283

Mexico* 89 -14 +14 +3.00 13.0 -23 -29

* The conversion factor used is 159 litres to a barrel and 7.1 barrels to a metric tonne. † Apparent demand. ‡ 4 weeks to end-month. ^ Taiwan lube production plus imports

sources: Country data for base oil and lube sales, production, imports and exports taken from national sourcesUs: Energy Information Administration. Japan: Petroleum Association of Japan. Italy: Unione Petrolifera. singapore: International enterprise. Country data for industrial production growth taken from national sources. Automobile sales data taken from national automobile associations. Us: Autodata Corp. Russia: Association of European Businesses in the Russian Federation. Australia: Federal Chamber of Automotive Industries. India: Society of Indian Automobile Manufacturers. thailand: Toyota Motor Thailand.

mARket FUndAmentALs

Global lubricating oils demand ’000 t

0

200

400

600

800

1,000

Apr 13 Oct 13 Apr 14 Oct 14

US China Germany Brazil

Global industrial growth Yoy%

-5

0

5

10

15

Apr 13 Oct 13 Apr 14 Oct 14

US China Europe

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mARket FUndAmentALs

Upcoming / recent expansions / conversions / new plants

Refiner Location timing new capacity Grade expansion / new plant

Hengli Petrochemical Dalian, China NA 683,000t/yr Group II and III New

Sasol Louisiana, US Around 2020 NA GTL New

Pemex Salamanca, Mexico 2018 3,300 b/d Group II Expansion

Petrobras Comperj, Brazil 2017 355,000 t/yr Group II New

Neste NA By 2017 200,000 t/yr Group III Expansion

Holly Frontier Wood Cross, US 2018 10,000-12,000 b/d Group III New

Hainan Handi Hainan, China End 2016 1.2mn t/yr Group III New

Luberef Yanbu, Saudi Arabia 1Q 2016 715,000 t/yr Group II New

VN Oil Hiep Phuoc, Vietnam Mar 2015 50,000 t/yr Group II re-refinery New

ExxonMobil Singapore 1Q 2015 NA Group II Expansion

ExxonMobil Baytown, US 1Q 2015 NA Group II Expansion

CNOOC Taizhou, China End-2015 600,000 t/yr Group II New

Panjin Northern Asphalt Liaoning, China 2015 300,000 t/yr Naphthenic base oils New

Jinling Petrochemical Nanjing, China 2015 200,000 t/yr Group II New

NIS, Serbia Serbia 2015 180,000 t/yr Group II/ naphthenic New

Nynas Harburg, Germany 2015 NA 350,000 t/yr naphthenic base oils Conversion/expansion

Sinopec Maoming, China Mid-2015 250,000 t/yr Group II Expansion

Sinopec Yanshan, China 2015 240,000 t/yr Group II Expansion

Adnoc Abu Dhabi, UAE 1Q 2015 620,000 t/yr 500,000 t/yr Group III, 120,000 t/yr Group II New

Tatneft Nizhnekamsk, Russia Dec 2014 186,000t /yr Group II/III New

SK Lubricants/Repsol Cartagena, Spain 20 Sep 2014 630,000 t/yr Group III 3-8cst New

Shell/Hyundai Oilbank Daesan, South Korea Aug-Sep 2014 650,000 t/yr Group II New

Hengrunde Petrochemical Shandong,China Aug 2014 200,000 t/yr Group II New

Heritage-Crystal Clean Indiana, US Mid-2014 25mn USG/yr Re-refined Group II light and mid-grade Expansion

Naftan Novopolotsk, Belarus May 2014 72,000 t/yr Group I Conversion

Chevron Pascagoula, US July-Aug 2014 1.25mn t/yr Group II New

Southern Oil Queensland, Australia Mar 2014 100mn l/yr NA New

Modrica refinery Modrica, Bosnia 2014 200,000 t/yr Group III Expansion

Puralube Troeglitz, Germany 2014 50,000 t/yr Group II NewHebei Feitian Petro-chemical Hebei, China Q4 2013 100,000 t/yr Group II New

Panjin Northern Asphalt Liaoning, China Oct 2013 400,000 t/yr Group II Expansion

S-Oil Onsan, South Korea Oct 2013 3,000 b/d Group III Expansion

SK Lubricants Ulsan, South Korea Jun 2013 11,000 b/d Group II heavy-grade, from Group III Conversion

Avista Oil (US) Peachtree, Georgia, US May 2013 1,000 b/d Group II New

Lwart Lencois Paulista, Brazil Jan 2013 150,000 t/yr Group II re-refinery New

Naftan Novopolotsk, Belarus Nov 2012 NA Add 6,000 t/month Group III Conversion

Sinopec Jinan, China 4Q 2012 50,000 t/yr Group II and BS, from 100,000 t/yr Group I Conversion/expansion

SK Lubricants/JX Energy Ulsan, South Korea May 2012 26,000 b/d Group III New

Heritage-Crystal Clean Indiana, US 1Q 2012 30mn USG/yr Re-refined Group II light grade New

Lotos Gdansk, Poland 2H 2012 NA Add Group II Conversion

PetroChina Fushun, China 3Q 2011 NA Only heavy-grade Group I Conversion

GS Caltex Yeosu, S. Korea Jun 2011 3,000 b/d Heavy-grade Group II Expansion

CNOOC Huizhou, China May 2011 400,000 t/yr Group II New

Bapco-Neste Sitra, Bahrain 2H 2011 400,000 t/yr Group III New

HPCL Mumbai, India 2H 2011 30,000 t/yr Group II and Group III, from Group I Conversion/expansion

Shell/Qatar Petroleum Qatar 2H 2011 1.5mn t/yr GTL New

Sinopec Shanghai, China 2Q 2011 NA Add 2,000 t/month Group III Conversion

Hainan Handi Hainan, China 1H 2011 70,000 t/yr Group II, from 230,000 t/yr Group I Conversion/expansion

Every effort has been made to verify information directly with appropriate company sources. The list will be updated when new information becomes available.


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