China Base Oil, First Half 2026: 150N Averaged RMB 9,233 per Tonne

China's base oil market spent the first half of 2026 trading a geopolitical story rather than a supply-and-demand one. Prices drifted down through the winter, jumped in the spring and gave back part of the gain by June, leaving the half-year average for mainstream 150N at RMB 9,233 per tonne. For anyone building a second-half budget, the distance between that headline number and what happened month by month is the part worth planning around.

The Shape of the Half

Data compiled by Longzhong puts the average price of mainstream 150N base oil at RMB 9,233 per tonne for the first half of 2026, up 20% on the second half of 2025 and 19% higher year on year. Both comparisons point the same way, which in most markets would describe a grade that moved in one direction. The monthly path says otherwise.

January and February were soft. Weak end-use demand and cautious downstream buying pushed prices lower through the winter, with formulators and traders running lean and waiting rather than restocking. March and April reversed the trend completely: Middle East tension lifted crude, domestic refineries entered their spring maintenance programmes, and several overseas units were offline at the same time. Supply tightened on three fronts at once and prices went straight up, with the 150N average breaking the RMB 10,000 mark in April and reaching RMB 10,413.71 per tonne, the peak for the year.

From late April the drivers flipped again. Crude retreated, high prices dampened buying interest, and May and June saw the market under sustained pressure. Within a single half-year, the same grade traded below its January starting level and then above five figures, four months apart. A market that reprices that quickly in both directions is not a market where a half-year mean describes anything a planner can use.

Grade Selection Mattered More Than the Average

Not everything moved together. High-viscosity Group II and higher-grade Group III stocks held firmer because spot availability was tight, while mainstream grades carried more of the correction. A blender whose slate leans on those tighter grades experienced the half differently from one working mainly in commodity volumes, even though both would quote the same 150N average as the market reference. The average is a reasonable starting point for a conversation; grade mix is what actually lands in the cost line.

Supply Grew Faster Than Demand

Output data tells a similar story. Domestic Group I, II and III base oil production reached 3.35 million tonnes in the January to June period, up 19% on the second half of 2025 and 26% higher year on year. Group II accounted for 2.85 million tonnes of that, up 23% on the previous half-year and 31% year on year, making it the main engine of supply growth. Monthly output followed a seasonal rhythm, running high in peak season and easing in the off-season.

Read the two data sets together and the conclusion is fairly clear. What lifted prices was not an absence of barrels overall but the concentration of disruption in a short window, layered on top of a geopolitical premium in crude. Rising output alongside rapidly rising prices is what a market looks like when the trigger sits outside its own fundamentals.

The Second-Half Setup

The more widely held view for the second half is that supply keeps its upward trend while imports are expected to shrink, leaving theoretical supply above theoretical demand. On that basis the loose balance continues, prices are unlikely to repeat the first-half highs, and the market should stay weak and range-bound with the price centre drifting modestly lower.

Two variables decide whether that holds. The first is the release pace of new domestic refining capacity and of units coming back from maintenance. The second is how much resilience end-use demand actually shows. With demand recovery expected to stay soft, the burden of proof sits on the supply side: if demand does not follow, incremental barrels get absorbed as price competition rather than as volume growth. Similarly, lower imports do not tighten a market automatically, and only do so if domestic output fails to cover the shortfall.

Planning Against a Range

The practical implication is that a budget anchored on RMB 9,233 is a budget anchored on a number that never described a month. The April peak is the figure worth stress-testing against, because it is the one the market has already demonstrated it can reach. Pre-agreed triggers for changing sourcing or pricing, set in a calm period, cost far less than negotiating similar terms during the next geopolitical event, when every counterparty is doing the same calculation at the same time.

Bottom line

The first half of 2026 delivered an average of RMB 9,233 per tonne for mainstream 150N, up 20% on the previous half-year and 19% year on year, but the path through those six months was far more violent than the average implies. With supply still expanding, imports expected to fall and demand recovery uncertain, the second half looks softer on paper. That is precisely why plans are safer built on a range with defined triggers than on a single average price.