· Asia’s base oils demand could get support as buyers focus on locking in supply to cover requirements during final weeks of Q3 2025.· Dynamic would highlight disconnect between typical seasonal slowdown in lube demand in month of August and need to secure base oils supplies to meet pick-up in demand at end of third quarter.· Expectations of sufficient supply could prompt buyers to maintain balanced inventories rather than to seek larger stocks.· Expectations of rise in surplus supply of some base oils grades could prompt buyers to further limit their procurement plans to cut their exposure to possibility of downward price adjustments.· Any signs of tighter-than-expected supply or firmer-than-expected demand for those base oils grades could conversely prompt buyers to speed up their procurement plans.· Demand for Group II heavy grades could get support from increasingly competitive price relative to Group I base oils and Group III 8cSt base oils, and relative to prices in other regions.· FOB NE Asia Group II N500 premium to Group I SN 500 extends fall to lowest since Sept 2024..· Narrower Group II price-premium boosts incentive for buyers to switch to using Group II base oils instead of Group I.· Any such pick-up in demand could erode recent rise in surplus supplies of Group II heavy grades..· China’s base oils demand shows signs of waning, both for supplies from domestic and overseas markets.· China’s domestic Group II N150 premium to FOB Asia cargo price extends fall to lowest since early-April 2025..· Narrower premium complicates arbitrage, boosts incentive for regional refiners to move shipments to other markets instead.· China’s base oils demand already falls in June 2025 for seventh time in eight months from year-earlier levels..· Muted demand incentivizes buyers to maintain low stocks.· Dynamic could trigger temporary periods of supply-tightness if plant-maintenance work or drop in imports leaves availability tighter than expected.· Recent surge in China’s domestic Group II price for imported supplies could reflect such a scenario..· Any such price-surge is likely to reverse once supply recovers, with such a scenario also showing signs of materialising.· Temporary nature of price-surge, combined with structurally-weak demand, incentivizes regional refiners to continue to focus on other markets rather than China even when such price-surges take place..· Singapore’s base oils exports to China fall sharply over last four weeks..· Slowdown adds to signs of slack demand in China and lack of any marked adjustment in flows to the country in response to recent strength of its domestic prices for imported supplies.· Slower demand in China could free up more supplies for southeast Asia.· Such a scenario coincides with signs of steady-to-high exports to southeast Asia.· Exports to the region from Asia’s key suppliers rise to eleven-month high in June 2025..· Singapore’s base oils exports to southeast Asia slip over last four weeks, but less sharply than to other key markets in the region..· Firm exports to southeast Asia would enable blenders to maintain lower stocks and to replenish them more frequently..· India’s imported Group II N500 cargo price-premium to FOB Asia cargo price holds firm even as it edges lower at end-July 2025..· Firm price-premium points to persistent buying interest in additional volumes, adds to signs of tighter-than-usual supply.· Any further drop in price-premium to FOB Asia cargo price could conversely point to signs of easing supply-demand fundamentals.· Buyers likely to be focusing more on covering requirements to meet pick-up in demand during final weeks of Q3 2025, rather than any demand slowdown during monsoon season.· Pick-up in demand at end-Q3 2025 could add to squeeze on buyers’ stocks.· India’s base oils supply lags demand in June 2025 by largest volume in ten months..· Any moves to replenish low stocks in early-Q3 2025 could be slower than expected amid signs of still-limited flows from Middle East.· Singapore’s base oils exports to India also fall sharply in last four weeks..· Tighter-than-expected supply could sustain firm buying interest in surplus volumes from the US.· Lower US Group II export prices in July 2025 boost their competitiveness vs CFR India prices, add to attraction of lining up more shipments from that market..India June base oils supply lags demand.China’s June base oils demand falls.Asia base oils demand outlook: Week of 21 July.Base Oil News stories and analyses also available on the ICIS platform
