· Asia’s base oils demand likely to be more muted as unusually extreme market volatility boosts incentive for buyers to keep inventories at lower levels.· Uncertainty about outlook and sharp fall in crude oil prices so far this month add to incentive to hold back.· Blenders could face lower-than-usual inventories at start of Q2 2025 because of tight supply and firm demand in Q1 2025.· Southeast Asia’s lube demand almost matches Asia-Pacific base oils exports to the region in three months to Feb 2025..· Dynamic leaves supply-demand balance tighter than year-earlier levels and much tighter than during same period in 2023.· Blenders still face less urgency to replenish depleted stocks as uncertainty about economic outlook coincides with likely seasonal slowdown in demand in coming months, especially versus month of March.· Asia’s lube demand faces prospect of sharper seasonal dip from end of Q2 2025..· Prospect of lower demand adds to incentive for blenders to procure supplies more slowly..· China’s demand for overseas supplies of Group III base oils likely to stay more muted in face of surging domestic output..· China’s demand for Group II base oils could ease if more blenders procure more Group III base oils instead.· Feasibility of such a scenario grows after China’s domestic Group III price premium to Group II prices falls to lowest in more than three years..· Any such pressure on China’s Group II base oils demand could compound its more muted buying interest in Group II supplies from overseas markets..· China’s demand for Group I base oils could stay firmer as country’s low production compounds impact of ongoing plant maintenance work.· China’s domestic Group I light/heavy-grade price differential continues to strengthen vs Group II base oils.· China's domestic Group I brightstock premium to FOB Asia cargo price extends rebound to highest in a year..· Rising brightstock premium to FOB Asia prices points to ongoing requirements for supplies from overseas markets, despite signs of rising domestic brightstock production.· Ongoing demand for overseas supplies suggests current domestic supplies are insufficient or their specifications differ from what blenders require..· Singapore’s base oils exports to India over last four weeks fall to lowest level in more than two months..· Singapore’s base oils exports to southeast Asia also stay lower over last four weeks.· Drop in shipments coincides with likely slowdown in base oils requirements following peak-demand period in month of March.· Any moves by blenders to slow the pace of stock-replenishment plans could add to dip in requirements..· India’s lube demand surges in March 2025 to second-highest level in three years..· Surge in lube demand likely outweighs base oils supply, cutting blenders’ stocks.· Dynamic likely prompted blenders to line up more replenishment shipments for arrival at end-Q1 2025 and start of Q2 2025.· Arrival of those shipments, combined with typical seasonal slowdown in Q2 demand vs Q1, could curb urgency for buyers to seek additional volumes.· Slump in crude oil prices since start of April 2025, combined with blenders’ sufficient stocks, adds to their incentive to hold back.· Expected improvement in domestic and overseas base oils supply following completion of plant maintenance work in Q2 2025 increases further the incentive for blenders to limit any stock-build.· Market volatility could boost attraction of procuring more domestic supplies or overseas supplies from markets that are logistically relatively close to India.· Any such move could curb demand for supplies from more distant sources like US.· Signs of pick-up in shipments from Saudi Arabia in recent weeks could curb further buyers’ interest in or need for supplies from US..· India’s imported Group II N500 cargo price extends rise vs Group I prices, vs FOB Asia prices, and vs FOB US export prices..· Premium extends rise even against backdrop of this month’s slump in crude oil prices and prospect of more muted demand in Q2 2025 vs previous three months. .India’s March lube demand rises.Asia’s lube demand likely to ease in coming months.China’s March base oils output rises.Asia’s February lube demand rises.Asia base oils demand outlook: Week of 7 April
