South Korean refiner S-Oil saw profit from its base oils and lube unit extend its rise in the fourth quarter of the year on the back of firm demand and high prices.The sustained profitability of the base oils unit contrasted with losses for the company’s refining and petrochemicals units during the final three months of the year.S-Oil expects base oils margins to continue to hold firm this year amid still strong supply-demand fundamentals for premium-grade base oils, especially in the first half of the year.The refiner’s operating profit from its base oils and lube unit came to 279.5bn South Korean won ($227mn) in the fourth quarter of the year.Profit rose by 23pc from year-earlier levels. S-Oil has now posted just one quarterly loss since the middle of 2019.Profit fell by 25pc from a record-high in the third quarter of the year, reflecting the seasonal slowdown in demand, lower prices and a drop in sales volumes. .The base oil unit’s sales fell to W840.4bn in the fourth quarter of the year, reflecting the impact of the seasonal slowdown in demand and lower prices. Revenue fell by 11pc from the third quarter.The lower demand and falling base oils prices incentivized regional refiners to cut run rates, especially for Group II base oils.Asia-Pacific Group II base oils prices fell to a steep discount to gasoil prices in the fourth quarter of the year, from a premium in the third quarter.S-Oil cut its base oils production levels in the fourth quarter to the lowest in two years. The lower run rates cut supply by around 80,000t from the previous quarter.Lower production in turn cut S-Oil’s base oils sales volume, adding to the drop in revenue.The squeeze on base oils margins and lower sales volume cut S-Oil’s base oils profit margin to 33.3pc in the fourth quarter.The margin was down from 39.8pc in the previous three months. But it remained unusually high.The refiner’s base oil profit margin got support from firm demand and prices for Group III base oils.Asia-Pacific Group III prices rose relative to gasoil in the fourth quarter of the year from the previous three months..Asia’s Nov base oils supply stays low
South Korean refiner S-Oil saw profit from its base oils and lube unit extend its rise in the fourth quarter of the year on the back of firm demand and high prices.The sustained profitability of the base oils unit contrasted with losses for the company’s refining and petrochemicals units during the final three months of the year.S-Oil expects base oils margins to continue to hold firm this year amid still strong supply-demand fundamentals for premium-grade base oils, especially in the first half of the year.The refiner’s operating profit from its base oils and lube unit came to 279.5bn South Korean won ($227mn) in the fourth quarter of the year.Profit rose by 23pc from year-earlier levels. S-Oil has now posted just one quarterly loss since the middle of 2019.Profit fell by 25pc from a record-high in the third quarter of the year, reflecting the seasonal slowdown in demand, lower prices and a drop in sales volumes. .The base oil unit’s sales fell to W840.4bn in the fourth quarter of the year, reflecting the impact of the seasonal slowdown in demand and lower prices. Revenue fell by 11pc from the third quarter.The lower demand and falling base oils prices incentivized regional refiners to cut run rates, especially for Group II base oils.Asia-Pacific Group II base oils prices fell to a steep discount to gasoil prices in the fourth quarter of the year, from a premium in the third quarter.S-Oil cut its base oils production levels in the fourth quarter to the lowest in two years. The lower run rates cut supply by around 80,000t from the previous quarter.Lower production in turn cut S-Oil’s base oils sales volume, adding to the drop in revenue.The squeeze on base oils margins and lower sales volume cut S-Oil’s base oils profit margin to 33.3pc in the fourth quarter.The margin was down from 39.8pc in the previous three months. But it remained unusually high.The refiner’s base oil profit margin got support from firm demand and prices for Group III base oils.Asia-Pacific Group III prices rose relative to gasoil in the fourth quarter of the year from the previous three months..Asia’s Nov base oils supply stays low
