· US base oils prices hold steadier vs feedstock/competing fuel prices.· Base oils margins stay sharply lower than in Sept 2024 and lower than year-earlier levels, when margins began to fall from Nov 2023.· Margins typically face downward pressure at year-end and early in the new year because of growing supply surplus.· Avoidance or reduction in size of supply surplus depends more on adjustments to supply in response to typical seasonal slowdown in demand. · Plant maintenance work in Oct 2024 helps to balance out weaker demand at start of Q4 2024.· Lack of scheduled maintenance work in Nov-Dec 2024 could trigger subsequent rise in output unless refiners adjust production accordingly.· Any rise in output, combined with lower demand, would add to pressure on refiners to clear surplus volumes through export market..· Recent fall in US Group II export prices facilitates pick-up in shipments to overseas markets.· Lower prices almost erase US Group II heavy-grade price premium to CFR India prices for first time since May 2024. .· Signs of increasingly regular shipments to markets like India suggest that prices for some supplies are already at levels that attract sufficient buying interest..· US Group III base oils supply from South Korea shows signs of holding relatively steady over coming months even with slump in exports from South Korea to US in Sept 2024..· US supplies in Oct 2024 likely to get boost from South Korea’s Sept-loading cargoes as well as some of its Aug-loading shipments..· Brazil set to take delivery of another cargo from South Korea in Nov 2024.· Shipment is third from South Korea since June 2024, reflecting pick-up in arbitrage flows to the country..· Additional arbitrage shipments from South Korea less likely over coming months following recent fall in US prices..· Europe’s Group I base oils supply surplus could remain more manageable for longer ahead of plant maintenance in Nov 2024.· Signs of pick-up in exports to markets like Nigeria and southeast Asia in recent weeks slow further speed of any supply-build. · Those shipments show signs of continuing through Oct 2024.· Flow of some US Group I supplies to West Africa rather than to Europe also curbs pace of supply-build.· Europe’s Group II base oils supply likely to stay readily available, following signs of sustained pick-up in volumes in Q3 2024.· Europe’s base oils imports from sources with major Group II plants stay higher than usual in Aug 2024 for second month..· Higher imports likely supplement firm regional output levels..· Europe’s Group III base oils supply could stay more balanced at start of Q4 2024 even as plant maintenance work coincides with slowdown in shipments from South Korea to the region..· Cargo loadings of premium-grade base oils from Spain show signs of holding steady in Oct 2024 even with plant maintenance work in the country..· Signs of rise in Europe’s Group III supplies in Q3 2024 likely to cushion further the impact of plant maintenance.· Europe’s Group III supply rises to multi-year high in Aug 2024..· Surge in supply contrasts with slump in regional lube demand, supporting rapid build-up of surplus volumes in Q3 2024..Americas/EMEA base oils demand outlook: Week of 21 Oct.Asia base oils supply outlook: Week of 21 Oct.Global base oils arb outlook: Week of 21 Oct .Global base oils margins outlook: Week of 21 Oct.Europe’s Aug Group III supply rises.S Korea’s September exports to US fall
· US base oils prices hold steadier vs feedstock/competing fuel prices.· Base oils margins stay sharply lower than in Sept 2024 and lower than year-earlier levels, when margins began to fall from Nov 2023.· Margins typically face downward pressure at year-end and early in the new year because of growing supply surplus.· Avoidance or reduction in size of supply surplus depends more on adjustments to supply in response to typical seasonal slowdown in demand. · Plant maintenance work in Oct 2024 helps to balance out weaker demand at start of Q4 2024.· Lack of scheduled maintenance work in Nov-Dec 2024 could trigger subsequent rise in output unless refiners adjust production accordingly.· Any rise in output, combined with lower demand, would add to pressure on refiners to clear surplus volumes through export market..· Recent fall in US Group II export prices facilitates pick-up in shipments to overseas markets.· Lower prices almost erase US Group II heavy-grade price premium to CFR India prices for first time since May 2024. .· Signs of increasingly regular shipments to markets like India suggest that prices for some supplies are already at levels that attract sufficient buying interest..· US Group III base oils supply from South Korea shows signs of holding relatively steady over coming months even with slump in exports from South Korea to US in Sept 2024..· US supplies in Oct 2024 likely to get boost from South Korea’s Sept-loading cargoes as well as some of its Aug-loading shipments..· Brazil set to take delivery of another cargo from South Korea in Nov 2024.· Shipment is third from South Korea since June 2024, reflecting pick-up in arbitrage flows to the country..· Additional arbitrage shipments from South Korea less likely over coming months following recent fall in US prices..· Europe’s Group I base oils supply surplus could remain more manageable for longer ahead of plant maintenance in Nov 2024.· Signs of pick-up in exports to markets like Nigeria and southeast Asia in recent weeks slow further speed of any supply-build. · Those shipments show signs of continuing through Oct 2024.· Flow of some US Group I supplies to West Africa rather than to Europe also curbs pace of supply-build.· Europe’s Group II base oils supply likely to stay readily available, following signs of sustained pick-up in volumes in Q3 2024.· Europe’s base oils imports from sources with major Group II plants stay higher than usual in Aug 2024 for second month..· Higher imports likely supplement firm regional output levels..· Europe’s Group III base oils supply could stay more balanced at start of Q4 2024 even as plant maintenance work coincides with slowdown in shipments from South Korea to the region..· Cargo loadings of premium-grade base oils from Spain show signs of holding steady in Oct 2024 even with plant maintenance work in the country..· Signs of rise in Europe’s Group III supplies in Q3 2024 likely to cushion further the impact of plant maintenance.· Europe’s Group III supply rises to multi-year high in Aug 2024..· Surge in supply contrasts with slump in regional lube demand, supporting rapid build-up of surplus volumes in Q3 2024..Americas/EMEA base oils demand outlook: Week of 21 Oct.Asia base oils supply outlook: Week of 21 Oct.Global base oils arb outlook: Week of 21 Oct .Global base oils margins outlook: Week of 21 Oct.Europe’s Aug Group III supply rises.S Korea’s September exports to US fall