· Asia’s base oils demand could turn more cautious amid signs of healthy availability and unusual change in trade flows.· Limited build-up of surplus supplies so far in Q3 2025 had eased concern about price-volatility, supporting steadier demand.· Buyers could instead limit their procurement plans amid unusual surge in Singapore’s base oils exports to southeast Asia in recent weeks..· Unusually steep rise in Singapore’s shipments follows pick-up in exports from key Asia suppliers to southeast Asia to thirteen-month high in Aug 2025..· Unusual rise in Singapore’s shipments to southeast Asia in recent weeks coincides with rare exports from Singapore to US and rise in shipments to Middle East in past week.· Rise in shipments to southeast Asia and unusual destination of other shipments could point to change in supply-dynamics in Singapore.· Change in trade flows could prompt buyers to hold back.· Surge in shipments to southeast Asia anyway likely leaves blenders with healthy stocks, curbing urgency to procure additional volumes..· China’s base oils demand could start to ease as rise in domestic output and more feasible arbitrage from Asia raise prospect of boosting buyers’ stocks.· Rise in supplies and stocks help to cover for seasonal rise in lube consumption at end-Q3.· Any signs of lower-than-usual seasonal pick-up in lube consumption would leave stocks lasting longer.· Seasonal boost in consumption typically starts to ease early in fourth quarter, raising prospect of removing that support for additional demand.· China’s domestic Group II light-grade price-premium to diesel prices steadies for second week.· China’s domestic Group II light-grade price-premium to FOB Asia N150 cargo price edges lower for first time in almost two months..· Steady or lower price-differentials, after recent gains, could point to price levels topping out.· Any extension of that price-trend would add to signs of supply-demand fundamentals starting to change..· India’s imported Group II cargo price-premium to FOB Asia/US prices holds firm..· Firm price-premium facilitates arbitrage from Asia and US, points to ongoing demand for additional supplies.· Demand holds firm even with rise in South Korea’s base oils exports to India in Aug 2025..· Rise in exports raises prospect of supporting revival in India’s base oils imports in Sept 2025.· Firm price-premium and steady demand suggests that supply-balance remains relatively tight even with pick-up in shipments from South Korea.· Ongoing signs of tighter supply follow dip in India’s base oils imports and rise in domestic lube demand in Aug 2025.· Lower imports and higher demand cut blenders’ stocks.· Dynamic leaves blenders requiring additional volumes to both replenish stocks and to meet expected rise in demand during upcoming festive season..· Demand in more distant markets for supplies from Asia could be more mixed.· Increasingly narrow gap between Group I and Group II heavy-grade prices in Middle East, and tighter availability of Group I base oils, could boost interest in securing more Group II heavy-grade supplies from Asia.· Demand for Group II light-grade base oils from Asia could face pressure as FOB Asia prices strengthen relative to prices in markets like India, northeast Asia and Americas..· Asia’s Group I heavy-neutrals prices show signs of more downward pressure than Group II prices.· FOB Asia Group I SN 500 price-discount to FOB Asia Group II N500 softens to widest level in more than a month..· Group I SN 500 price-discount to Group II N500 had narrowed steadily for almost five months to end-Aug 2025 before starting to reverse that trend in Sept 2025.· Ex-tank Singapore Group I SN 500 premium to FOB Asia SN 500 extends fall to lowest in almost three months..· Sliding premium contrasts with steadier ex-tank Singapore Group II N500 price-premium to FOB Asia price.· Firmer ex-tank Group II premium points to more muted pressure from persistent surplus supply throughout Q3 2025.· Weaker ex-tank Group I SN 500 premium points to growing pressure from oversupply even with pick-up in surplus volumes only materialising in recent weeks. .S Korea's Aug base oils exports to India rise.Asia base oils demand outlook: Week of 15 September.Global base oils margins outlook: Week of 15 September.Base Oil News stories and analysis also available on ICIS platform
