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Asia's lube demand extends rise despite typical seasona slowdown
India remains key growth driver, while demand also climbed in soutehast Asia and northeast Asia
Firmer demand eased year-end pressure on base oils stocks and regional prices
Asia’s lubricant demand rose for a fifth month in November, defying a typical year-end seasonal slowdown and sustaining requirements for replenishment base oils supplies.
Total regional demand exceeded 860,000 tonnes in November, up from less than 830,000 tonnes in October and 7% higher year on year, government data showed. The volume excludes China.
Demand held at or above the 860,000 tonne level for the fourth time in six months, after exceeding that threshold just three times across the whole of 2024, highlighting a strengthening underlying consumption trend.
Key Highlights
· Demand rose across most Asian markets, contrasting with shrinking consumption in southeast Asia and northeast Asia in October.
· Demand in India remained the region’s single largest growth driver, with momentum showing signs of extending into this year.
· Demand in southeast Asia was more mixed, with firmer requirements in Vietnam contrasting with weaker consumption in Thailand and the Philippines.
· Demand in Japan rose for a second month, offsetting weaker consumption in South Korea.
· Demand climbed against the backdrop of rising China base oils demand for the fourth time in five months.
· Base oils demand in the Middle East was also firmer than usual as plant-maintenance boosted requirements for alternative supplies.
Market Repercussions
Rising lube demand accelerated blenders’ need for replenishment volumes and increased their comfort with holding larger base oils inventories.
Asia’s base oils prices faced downward pressure during the final months of the year.
But their relative stability at year-end, especially for lighter grades, added to buyers’ comfort with maintaining larger stock levels.
For refiners, steady-to-firm demand in turn cut the risk of a significant build-up of surplus volumes carried into the start of this year, limiting the need for significant price adjustments to facilitate long-haul arbitrage shipments.
