C1 (Shanghai)--03/11/2010----Asian spot market is expected to suffer interruption in Group III base oils supply in the near future, as demand for these products is rising while supply drops on refinery maintenance, C1 forecast.
Supported by lubricants production peak, demand for Group III base oils is robust in Asia overall. However, the Asian spot market is running short of supply as some major producers have halted sales due to maintenance.
As C1 reported earlier, South Korea's S-Oil refinery shut down its base oil units in late-February for reconstruction and would not resume normal production until mid-April. The refinery would offer no base oils to spot market during March and April and its base oils stocks would only be available for contract buyers.
In addition, another South Korean refinery, SK Energy, has also suspended base oils production, and has no plan to restart until early May, a source with the company revealed. The refinery would supply all base oils stocks to underlying lubricants plants.
Supply from one Southeast Asian refinery also dropped recently, due to unit glitch, said marketers.
Due to the shortage of Group III base oils, some lubricant plants in China have to purchase the Group II materials for blending of similar grades with the former.
