South Korean refiner GS Caltex saw profit from its base oils and lube unit surge in the third quarter to its second highest on record amid firm prices and lower costs.The higher profit mirrored a similar trend throughout the Asia-Pacific region among Group I, Group II and Group III producers.The contrast with the squeezed profitability of regional blenders highlighted the refiners’ benefit of lower crude oil feedstock costs. At the same time, the relatively steady base oils prices deprived blenders of a similar drop in costs.GS Caltex’s base oils and lube unit’s operating profit came to 165 billion South Korean won ($123.6mn) in the three months to end-September. Profit rose by 61pc from W102.5bn during the second quarter of the year..Profit surged even as sales rose by just 0.1pc to W558.4bn.Sales edged up as higher refinery run rates countered a 4pc fall in Group II base oils prices in the third quarter from the previous three months.Profit rose as crude oil prices fell more steeply, cutting feedstock costs.Profit was down 6pc from a record-high W174.7bn during the same period last year. Profit fell even as sales rose 16pc from W481.3bn during the third quarter of 2021.The year-earlier profit benefited from even lower crude oil prices. Year-earlier sales got a boost from unusually high Group II heavy-grade prices. But low light-grade prices capped the rise in revenue.Sales in the third quarter of this year got a boost from firm prices for both light and heavy-grade base oils.The stronger light-grade prices partly reflected the unusual strength of diesel prices and refiners’ option of redirecting light-grade base oils or feedstock back into the diesel pool.That option was less feasible last year when diesel prices were much lower.Firm base oils prices, steady demand in markets like southeast Asia and Latin America and lower costs boosted the base oils unit’s profit margin to 29.5pc in the third quarter.The margin was up from 18.4pc during the previous three months and the highest in a year.The margin was also higher than average levels of around 16pc in the four years to end-2020..GS Caltex Q2 lube profit stays firm
