· Asia’s base oils demand could hold firm over the coming weeks as buyers replenish low stocks and lube consumption holds steady.· Rising crude oil prices could provide additional support.· Seasonal slowdown in demand from end of second quarter typically starts to curb buying interest several weeks before then.· High base oils prices, as well as uncertainty about extent and impact of US tariffs, incentivize buyers to procure sufficient supplies but avoid moves to build larger stocks..· China’s base oils demand could get support from ongoing plant maintenance in the country.· Any such support could be temporary amid signs of structural drop in demand.· China’s base oils demand falls by 10% in first two months of 2025, after rising in 2024..· Shrinking demand would compound drop in requirements for supplies from overseas markets.· Arbitrage to import additional Group II supplies from Asia stays hard to work even during round of plant maintenance, reflecting that dynamic..· Any extension of fall in China’s demand would extend pressure to country’s domestic refiners.· Any extension of fall in demand would increase attraction for domestic refiners and blenders to boost exports.· China’s lube exports rise in first two months of 2025, extending surge in shipments during previous five years..· Rising lube exports could partially cushion impact of shrinking domestic demand.· Rising lube exports could increase competition in overseas markets, curbing base oils requirements in those markets..· China’s Group I base oils prices strengthen vs Group II base oils and vs FOB Asia cargo prices, especially for heavy grades..· Group I price-strength suggests China’s plant maintenance has larger impact on Group I supply-demand fundamentals than on Group II fundamentals..· Singapore’s base oils exports to China, India, and southeast Asia stay higher than usual in March 2025 for second month..· High exports partially balance out impact of drop in shipments from Taiwan and plant maintenance work throughout Asia-Pacific region in March 2025.· Exports likely to need to stay at more elevated levels to cushion impact of extension of plant maintenance work into Q2 2025.· Extension of maintenance work could support firm demand for supplies from Singapore as blenders seek to replenish depleted stocks..· India’s base oils demand for overseas shipments likely to get support to cover for lower domestic supply over coming months as plant maintenance cuts output.· Tighter domestic supply would complicate blenders’ plans to replenish depleted stocks following peak-demand season in month of March.· Blenders’ stocks were already likely lower than usual before peak-demand season amid tighter supply-demand balance in early 2025..· Dynamic could support firm demand for overseas supplies even with likely seasonal slowdown in lube consumption at start of Q2 2025. · Demand could focus more on very-light grade base oils, whose imports slumped in Feb 2025, rather than heavy-grade base oils, whose imports surged in Feb 2025..· India’s imported Group II heavy-grade cargo price premium to FOB Asia and US export prices widens in March 2025..· Wider premium points to ongoing buying interest in heavy grades despite surge in imports in Feb 2025..India’s February base oils output falls.China’s February base oils demand falls
· Asia’s base oils demand could hold firm over the coming weeks as buyers replenish low stocks and lube consumption holds steady.· Rising crude oil prices could provide additional support.· Seasonal slowdown in demand from end of second quarter typically starts to curb buying interest several weeks before then.· High base oils prices, as well as uncertainty about extent and impact of US tariffs, incentivize buyers to procure sufficient supplies but avoid moves to build larger stocks..· China’s base oils demand could get support from ongoing plant maintenance in the country.· Any such support could be temporary amid signs of structural drop in demand.· China’s base oils demand falls by 10% in first two months of 2025, after rising in 2024..· Shrinking demand would compound drop in requirements for supplies from overseas markets.· Arbitrage to import additional Group II supplies from Asia stays hard to work even during round of plant maintenance, reflecting that dynamic..· Any extension of fall in China’s demand would extend pressure to country’s domestic refiners.· Any extension of fall in demand would increase attraction for domestic refiners and blenders to boost exports.· China’s lube exports rise in first two months of 2025, extending surge in shipments during previous five years..· Rising lube exports could partially cushion impact of shrinking domestic demand.· Rising lube exports could increase competition in overseas markets, curbing base oils requirements in those markets..· China’s Group I base oils prices strengthen vs Group II base oils and vs FOB Asia cargo prices, especially for heavy grades..· Group I price-strength suggests China’s plant maintenance has larger impact on Group I supply-demand fundamentals than on Group II fundamentals..· Singapore’s base oils exports to China, India, and southeast Asia stay higher than usual in March 2025 for second month..· High exports partially balance out impact of drop in shipments from Taiwan and plant maintenance work throughout Asia-Pacific region in March 2025.· Exports likely to need to stay at more elevated levels to cushion impact of extension of plant maintenance work into Q2 2025.· Extension of maintenance work could support firm demand for supplies from Singapore as blenders seek to replenish depleted stocks..· India’s base oils demand for overseas shipments likely to get support to cover for lower domestic supply over coming months as plant maintenance cuts output.· Tighter domestic supply would complicate blenders’ plans to replenish depleted stocks following peak-demand season in month of March.· Blenders’ stocks were already likely lower than usual before peak-demand season amid tighter supply-demand balance in early 2025..· Dynamic could support firm demand for overseas supplies even with likely seasonal slowdown in lube consumption at start of Q2 2025. · Demand could focus more on very-light grade base oils, whose imports slumped in Feb 2025, rather than heavy-grade base oils, whose imports surged in Feb 2025..· India’s imported Group II heavy-grade cargo price premium to FOB Asia and US export prices widens in March 2025..· Wider premium points to ongoing buying interest in heavy grades despite surge in imports in Feb 2025..India’s February base oils output falls.China’s February base oils demand falls
