· Asia’s base oils demand likely to stay cautious even with round of stock-replenishment in coming weeks.· Asia’s lube demand likely to rise over coming months after bottoming out in month of August..· Lower demand in August likely triggers pick-up in surplus supplies in Asia-Pacific region.· Expectations of improving availability of supply in Asia and other markets give blenders flexibility to maintain lower stocks and to replenish inventories more frequently.· Lower crude oil prices, combined with improving availability of supply, increase risk of price-adjustments to better reflect current fundamentals.· Sufficient supply and concern about price-adjustments add to incentive for buyers to manage stocks carefully.· Dynamic raises prospect of buyers relying more on term volumes to cover requirements, and of curbing procurement of additional supplies..· China’s base oils demand could be more muted than usual at time of year when blenders replenish stocks ahead of seasonal pick-up in lube consumption.· China’s base oils demand rises in July 2025 from year-earlier levels for first time in three months..· Pick-up in demand could reflect moves to replenish low stocks after dip in domestic supply in Q2 2025.· Moves to replenish low stocks, combined with slack end-user consumption, could curb volume of additional supplies that blenders require to cover typical pick-up in demand at end-Q3.· Prospect of higher domestic base oils output, combined with more muted demand, could trigger deeper slowdown in demand for supplies from overseas markets.· China’s domestic Group II light-grade price-premium to FOB Asia cargo price stays low even as it edges higher..· Low price-premium complicates arbitrage, pointing to more muted buying interest in overseas shipments.· Overseas suppliers could still tap signs of firmer demand for certain base oils grades.· China’s domestic Group I brightstock price-premium to FOB Asia cargo price holds in narrow range since end-May 2025..· Steady price-premium contrasts with slump in price-premium this time a year ago.· Steady price-premium points to ongoing buying interest in additional supplies and sustains feasibility of arbitrage shipments..· Demand in southeast Asia could be more muted, with buyers likely to have replenished low stocks in recent weeks.· Base oils exports to southeast Asia from Asia’s key suppliers hold steady in July 2025 from previous month..· Steady exports likely coincide with seasonal slowdown in demand in July-Aug 2025.· Demand in southeast Asia previously exceeds base oils exports to the region in May-June 2025..· Steady base oils exports and lower demand in July 2025 gives blenders opportunity to replenish depleted stocks.· With stocks replenished, buyers could seek smaller volumes more frequently to maintain sufficient inventories.· Singapore’s base oils exports to southeast Asia hold at lower levels over past four weeks, pointing to such a dynamic..· Ex-tank Singapore Group II N500 price-premium to FOB Asia cargo price extends rise in H2 Aug 2025..· Rising price-premium points to prospect of price-correction, or to signs of ongoing buying interest in Group II heavy grades in markets like southeast Asia.· Rising Group II price-premium contrasts with drop in ex-tank Singapore Group I SN 500 price premium to FOB Asia cargo price.· Any extension of price dynamic could point to weakening Group I SN 500 fundamentals, and to weakening Group I fundamentals relative to Group II base oils..· India’s base oils demand could ease in short term amid signs of improving availability from growing number of sources.· India’s imported Group II N500 cargo price-premium to FOB Asia cargo price falls in H2 Aug 2025 to lowest level since H1 April 2025..· Price-premium narrows because CFR India cargo price falls at faster pace than FOB Asia price.· Improving availability of supply gives buyers flexibility to hold back, and incentive to hold back to limit exposure to risk of lower prices.· India’s underlying base oils demand likely to be firm if blenders’ inventories remain at balanced-to-lower levels ahead of seasonal pick-up in consumption in coming months.· Demand could get additional support amid signs of slowdown in shipments from Asia reaching the country in Aug 2025.· Slowdown in shipments could limit size of any supply-build, leaving blenders seeking additional shipments in preparation for seasonal pick-up in demand..China’s July base oils demand rises.Asia base oils demand outlook: Week of 18 August.Global base oils exports to Middle East rise in July .Base Oil News stories and analysis also available on ICIS platform
