· US base oils prices edge higher vs competing fuel/feedstock prices.· Some refiners cited higher feedstock costs in early 2025 as factor for raising some posted prices in early-Feb 2025.· Posted prices and outright prices hold steady even as feedstock prices fall in recent weeks, eroding key factor supporting earlier rise in prices.· Steady prices, despite lower feedstock prices, could point to muted pressure from surplus supply.· Steady prices and firmer margins could also limit pressure on any moves to adjust prices higher.· Recent and upcoming plant shutdowns likely to shrink further any supply surplus.· Shutdowns set to coincide with seasonal pick-up in demand.· US plant maintenance work could have more muted impact on markets like Europe, where higher regional Group II output is likely to cushion any slowdown in supplies from US..· Latin America’s base oils supply shows signs of tightening in early 2025.· Drop in supplies follows dip in US exports to South America at end-2024.· Argentina’s base oils supply falls to fifteen-month low in Jan 2025, mostly because of slump in imports from US..· Drop in Argentina's supply contrasts with signs of steadier domestic lube production.· Diverging trends raise prospect of shrinking inventories and of blenders’ earlier need to replenish lower stocks.· Any repeat of that pattern in other markets in South America would magnify stock-draw and need for replenishment supplies.· Pick-up in Argentina’s base oils exports extends to end-Feb 2025, with loading of unusually large cargo late last month.· Prospect of tighter regional supply and firm demand boosts attraction of shipments from markets like Argentina with faster delivery time.· Dynamic could trigger sustained demand, and subsequently sustained supply of these shipments..· US Group III base oils prices continue to hold firmer vs Group II prices, vs VGO and vs prices in other regions.· Firm US Group III prices coincide with signs of strong pick-up in shipments set to reach US in March 2025, especially vs Feb 2025.· Firmer US Group III base oils prices from Q4 2024 follow slump in global imports of Group III base oils from Middle East in Dec 2024..· Drop in global imports mostly reflects simultaneous slump in shipments from Qatar to US and to Asia..· Fall in shipments cushions impact of seasonal slowdown in demand in US and Asia at year-end, curbing size of supply-build in those markets.· Europe is outlier, with imports from Qatar holding steady in Dec 2024.· Europe’s Group III base oils prices face more downward pressure in Dec 2024 and early this year vs US and Asia markets..· Price pressure suggests Europe market continues to struggle to absorb any additional Group III supplies..· Europe’s Group II base oils supply shows signs of starting 2025 at healthy level after pick-up in volumes at end-2024..· Supply rises in Dec 2024 as persistently-high base oils output in Netherlands more than counters drop in imports from Group II markets outside Europe.· Netherlands’ high output raises its share of Europe’s Group II supply to more than 60% in Q3 and Q4 2024, from less than 50% in H1 2024..· Netherlands' lower domestic consumption and exports magnify impact of its higher output, triggering surge in country’s net supply and stocks in Dec 2024..· Any extension of Netherlands’ high base oils output would put pressure on overseas suppliers to redirect more Group II shipments to other markets instead unless Europe’s Group II demand rises.· Netherlands’ base oils output averages more than 108,000 tonnes/month in H2 2024, up from around 86,000 tonnes/month in 2023.· Output sees similar rise to 101,000 tonnes/month in 2021, followed by drop to 86,000 tonnes/month in 2022.· Trend suggests Netherlands’ base oils output could fall in 2025 from higher-than-usual levels in H2 2024, which followed plant maintenance in H1 2024..· Shipments of Group III base oils supply from Spain to northwest Europe shows signs of staying lower than usual in Feb 2025..· Lower volumes likely to limit any surplus availability of supplies with full set of OEM approvals..Global premium-grade imports from Middle East fall in Dec.Netherlands’ Dec base oils output rises.Argentina’s Jan base oils supply falls.Americas/EMEA base oils demand outlook: Week of 3 March.Asia base oils demand outlook: Week of 3 March.Global base oils margins outlook: Week of 3 March.Base Oil News stories and analysis also available on ICIS platform
