· Americas/Europe base oils demand faces seasonal slowdown, pressure from lower feedstock prices.· US posted price-cuts likely to ease blenders’ concern about exposure to lower prices, supporting any underlying demand.· Posted price-cuts could complicate blenders’ moves to raise finished-lube prices in Q4 2023.· Posted price-cuts ease pressure on blenders to implement those moves.· Americas base oils demand could be firmer than usual as competitive US prices boost attraction of US supplies, curb feasibility of arbitrage shipments from other regions.· Any such pick-up in demand outside domestic US market has growing impact on US suppliers. .· US September base oils/lube exports account for more than 50pc of US’ total demand for seventh month in a row..· Rising exports support rise in US’ total demand in Sept 2023.· Exports accounted for more than 50pc of US’ total demand just once in 2022 and total of ten times during 2019-2021.· Trend highlights overseas markets’ growing importance as outlets to tap rising demand, to counter weaker domestic demand and to avoid build-up of surplus supplies.· Trend highlights importance of export prices that sustain firm demand in those overseas markets.· Trend could grow further in importance if US base oils production rises from this year’s lower-than-usual levels..· Argentina’s October lube demand rises for first time in four months..· Stronger lube demand adds to signs of firmer-than-expected lube consumption in Latin America in Q4 2023.· Firmer lube demand would boost requirements for base oils to produce lubricants, such as Group III base oils.· Firmer finished lube demand in the region would likely be insufficient to counter the impact of Mexico’s restrictions on base oils imports from end-Oct 2023..· Europe’s surplus of supply over demand falls more than 20pc in Q3 2023 from year-earlier levels..· Europe’s base oils demand could get support from more balanced supply-demand fundamentals even as consumption faces seasonal slowdown over coming weeks..· Europe’s Group II base oils demand could face pressure from concern about rise in supply as rising price-premium to other markets boosts attraction of moving more shipments to Europe.· Europe’s Group III base oils demand could get support from healthy availability and increasingly competitive prices vs Group I/II base oils.· Overseas demand for Europe base oils could face more downward pressure as more competitive US prices boost attraction of locking in supplies from that market instead..Global base oils - week of Dec 11: Demand outlook.Global base oils - week of Dec 11: Price outlook - margins.Asia base oils - week of Dec 11: Demand outlook.Base Oil News stories and analysis also available on ICIS platform
