· Asia’s base oils demand could be more cautious amid expectations of healthy availability of supply within the region and in other markets.· Signs of more manageable build-up of surplus supplies in July-Aug 2025 curb pressure on refiners to make sharp price adjustments to clear volumes.· Signs of pick-up in availability of supplies in other markets could still put pressure on regional refiners to adjust prices to stay competitive.· Healthy availability of supply and concern about exposure to lower prices incentivize buyers to procure smaller volumes more frequently..· Asia’s Group I base oils demand shows signs of softness.· Asia’s Group I base oils prices and margins hold in narrow range so far in Q3 2025 despite sharp drop in supply in early-Q3..· Steady price levels and lower supply point to slack demand, keeping fundamentals relatively balanced.· Ex-tank Singapore Group I SN 500 price-premium to FOB Asia cargo price begins to fall from H2 Aug 2025, with slide extending into Sept 2025..· Drop in price-premium coincides with restart of Group I unit in Thailand after plant-maintenance work.· Drop in SN 500 price-premium contrasts with sustained rise in ex-tank Group II N500 price-premium to FOB Asia cargo price from June to late-Aug 2025.· Ex-tank N500 price-premium extends rise despite steady rise in surplus supply throughout Q3 2025.· Dynamic suggests ex-tank Group I SN 500 price-premium responds faster to rise in supply than Group II N500 price-premium does.· Dynamic could reflect firmer underlying demand for Group II N500, cushioning impact of rise in supply, and weaker underlying demand for Group I SN 500, magnifying impact of rise in supply.· Concern about further pressure on Group I SN 500 prices could add to slowdown in demand..· Demand in southeast Asia could stay more muted as steady exports to the region contrast with signs of weaker lube consumption in July 2025.· Dynamic would likely leave blenders with larger stocks ahead of seasonal rise in demand at end-Q3.· Thailand’s lube consumption falls to two-year low in July 2025..· Slump in demand cushions impact of plant-maintenance work in Thailand, magnifies impact of surge in imports.· Thailand’s base oils imports exceed domestic demand in July 2025 for first time in almost three years..· Rise in surplus supply, and concern about extension of demand-weakness, likely to prompt blenders to work down inventory-overhang before seeking replenishment stocks.· Even then, concern about demand outlook could incentivize blenders to keep stocks at lower levels..· Philippines’ base oils and lube imports fall in July 2025 for fifth month and at fastest pace in two years..· Timing of dip in imports in recent months coincides with US moves to levy high import tariffs..· Singapore’s base oils exports to southeast Asia continue to hold steady in narrower range in recent weeks, even if down from levels in May-June 2025..· Steady flows from Singapore, combined with any slowdown in regional requirements, could curb buying interest in supplies from other key sources like South Korea..· China’s base oils demand could wane if end-user lube consumption stays muted following signs of large round of stock-building.· China’s base oils output rebounds to ten-month high in Aug 2025..· Rise in output and firm Group II light-grade margins coincide with ongoing rise in domestic light-grade price-premium to FOB Asia cargo prices..· Wide premium facilitates arbitrage flows, raising prospect of attracting additional supplies.· China’s lube demand would need to see similarly-strong pick-up to absorb replenished stocks as well as any additional supplies.· More muted demand would conversely leave stocks lasting longer, curbing for longer any need to replenish those stocks.· Singapore’s base oils exports to China extend fall over last four weeks..· Dip in shipments could reflect more muted demand from term buyers..· India’s base oils demand for supplies from US and Europe could rise amid more feasible arbitrage.· CFR India Group II N500 price-premium to FOB US export price holds at widest level in more than a month.· CFR India Group I SN 500 price flips to premium to FOB Europe export price in early-Sept 2025 for first time since April 2024..· Increasingly firm CFR India price-differentials boosts attraction and feasibility of lining up more shipments from US, and even from Europe.· India’s base oils demand for shipments from those markets could conversely ease in short term amid concern about any further fall in US and Europe outright prices.· Any such moves to hold back could face pressure from prospect of firm underlying demand to replenish stocks ahead of seasonal pick-up in lube consumption.· Dynamic leaves buyers facing challenge of covering requirements while minimizing their exposure to any further fall in prices in US and Europe.· Buyers could target lower CFR India prices to cover against such exposure..China’s August base oils output rises.Thailand’s July lube demand slumps.Asia base oils demand outlook: Week of 1 September.Asia base oils supply outlook: Week of 1 September.Base Oil News stories and analysis also available on ICIS platform
