Global base oils supply edged up in June on the back of a pick-up in volumes from the Americas and Middle East.The rise in supply contrasted with a slowdown in demand, especially in the Americas market.The disconnect triggered a rise in the surplus of supply over demand to a five-month high.That surplus typically extends its rise during the second half of the year.An extension of that trend could be more pronounced this year because of the expected start-up of new production capacity in Asia in the coming months.Base oils supply in the Americas, Europe and Asia markets rose to more than 2.70 million tonnes in June, government and industry data showed..The volume rose from less than 2.68 million tonnes in May to a three-month high. It still fell by 4% and for the fourth time in five months from year-earlier levels.Supply slipped from year-earlier levels as a dip in output in Europe and a sustained fall in production in Asia outweighed a revival in volumes from the Americas market..Demand by contrast fell in the Americas market and Asia and flatlined at already-low levels in Europe.With global demand falling faster than supply, the surplus recovered to a five-month high in June.Even with that recovery, the surplus in the second quarter of the year was the smallest for that three-month period since 2021..The tighter surplus availability coincided with firm base oils margins in all the key global markets.The global supply-surplus typically rises strongly in the third and fourth quarters of the year amid a seasonal slowdown in demand and with most plant-maintenance work already completed.Global base oils margins typically trend lower during that period, reflecting those weaker fundamentals.The expected start-up of new base oils production capacity could magnify the size of any such rise in surplus volumes in the final months of this year.Any further slowdown in global lube demand would add further to the size of the surplus..Latin America’s June lube demand falls.Asia’s June lube demand recovers.US June base oil supply exceeds demand.Netherlands’ June base oils output falls.UK’s June base oils output falls.Italy’s June lube demand rises.Base Oil News stories and analysis also available on ICIS platform
