South Korean refiner S-Oil saw profit from its base oils and lube unit fall in the first quarter to the lowest in more than four years as weak Group III base oils prices squeezed margins.The base oil unit’s operating profit of 109.7 billion South Korean won ($77 million ) in the three months to end-March fell by 30% from year-earlier levels to the lowest level since the fourth quarter of 2020.S-Oil is one of the world’s largest producers of premium-grade base oils.Profit fell even as sales rose by 3% and for the fourth time in the last five quarters.Sales got a boost from a rebound in base oils supply, after refinery-run rates dipped in the fourth quarter of 2024 to the lowest in more a year because of scheduled plant maintenance work.But the rise in sales was insufficient to counter the impact of a slump in Group III base oils prices that outpaced lower feedstock costs.Europe’s Group III 4cSt (low) price averaged less than $1,100/tonne in the first quarter of the year, ICIS data showed.The price was down more than 23% from more than $1,400/tonne during the same period a year earlier.Prices fell in response to weak demand and persistent surplus supply.The price-drop outpaced the 7% fall in vacuum gasoil prices during the same period.The Europe Group III 4cSt price-premium to VGO duly fell to less than $480/tonne in the first three months of the year, down from more than $760/tonne in the first quarter of last year.US Group III prices followed a similar trend, with outright prices slumping from year-earlier levels and outpacing the drop in VGO prices.The US and Europe are key markets for S-Oil’s Group III base oils.Its base oil unit’s operating profit margin reflected the impact of the lower prices.The unit’s profit margin of 13.9% in the first quarter fell from 14% during the previous three months and more than 20% in the first quarter of 2024 to the lowest level since 2019..Still, the lower profit for S-Oil’s base oils unit contrasted with and almost managed to balance out an operating loss for its refining and its petrochemicals units.S-Oil expected an improvement in margins in the second quarter of the year, when the market faced a seasonal pick-up in demand and a drop in supply because of plant maintenance work.Margins could also get a boost from the recent fall in feedstock costs, while Group III prices in Europe and US held steady-to-firm..S Korea’s March base oils output falls.S Korea’s March base oils exports fall
South Korean refiner S-Oil saw profit from its base oils and lube unit fall in the first quarter to the lowest in more than four years as weak Group III base oils prices squeezed margins.The base oil unit’s operating profit of 109.7 billion South Korean won ($77 million ) in the three months to end-March fell by 30% from year-earlier levels to the lowest level since the fourth quarter of 2020.S-Oil is one of the world’s largest producers of premium-grade base oils.Profit fell even as sales rose by 3% and for the fourth time in the last five quarters.Sales got a boost from a rebound in base oils supply, after refinery-run rates dipped in the fourth quarter of 2024 to the lowest in more a year because of scheduled plant maintenance work.But the rise in sales was insufficient to counter the impact of a slump in Group III base oils prices that outpaced lower feedstock costs.Europe’s Group III 4cSt (low) price averaged less than $1,100/tonne in the first quarter of the year, ICIS data showed.The price was down more than 23% from more than $1,400/tonne during the same period a year earlier.Prices fell in response to weak demand and persistent surplus supply.The price-drop outpaced the 7% fall in vacuum gasoil prices during the same period.The Europe Group III 4cSt price-premium to VGO duly fell to less than $480/tonne in the first three months of the year, down from more than $760/tonne in the first quarter of last year.US Group III prices followed a similar trend, with outright prices slumping from year-earlier levels and outpacing the drop in VGO prices.The US and Europe are key markets for S-Oil’s Group III base oils.Its base oil unit’s operating profit margin reflected the impact of the lower prices.The unit’s profit margin of 13.9% in the first quarter fell from 14% during the previous three months and more than 20% in the first quarter of 2024 to the lowest level since 2019..Still, the lower profit for S-Oil’s base oils unit contrasted with and almost managed to balance out an operating loss for its refining and its petrochemicals units.S-Oil expected an improvement in margins in the second quarter of the year, when the market faced a seasonal pick-up in demand and a drop in supply because of plant maintenance work.Margins could also get a boost from the recent fall in feedstock costs, while Group III prices in Europe and US held steady-to-firm..S Korea’s March base oils output falls.S Korea’s March base oils exports fall
