· US base oils demand could ease as lower crude/diesel prices and sufficient supplies incentivize buyers to hold back in anticipation of more price adjustments.· Buyers could cover seasonal pick-up in demand at end-Q3 with inventories built up earlier, curbing requirements for additional supplies.· Strength of any seasonal pick-up in demand could anyway be more muted amid sustained slowdown in domestic lube consumption.· Still-high export prices relative to overseas markets could curb demand in outlets like India.· Signs of recent pick-up in shipments to markets like India point to prices at levels that were able to attract sufficient demand.· Demand for Group III base oils likely to get support from competitive prices vs Group II base oils.· Prospect of plentiful Group III supply could give buyers the option of procuring smaller volumes more frequently, curbing any sharp rise in demand. · Latin America’s base oils demand likely to ease as lower prices and improving availability boost attraction of holding off.· Prospect of seasonal slowdown in demand in Q4 2024 gives buyers additional leverage to hold back.· US Group II export price-premium to FOB NE Asia prices starts to narrow slightly in Sept 2024.· Any extension of the trend could prompt buyers in Latin America to target more supplies from US instead of Asia.· Any such move could cushion a slowdown in outright demand..· Chile’s base oils imports fall in Aug 2024 for second month from year earlier; 3-month rolling average imports rise 2% yoy..· Contrasting trends mirror Chile’s economy, which contracted in Q2 2024 before showing signs of improving in Q3 2024.· Any further improvement in economic activity could support pick-up in base oils requirements..· Europe’s Group II base oils demand could improve amid expectations of steadier supply compared with H1 2024.· Still-competitive Group II prices relative to Group I base oils could provide further support, and simultaneously erode demand for Group I base oils.· Any pick-up in Group II base oils demand is likely to be muted, even with seasonal pick-up in requirements at end-Q3, amid sustained drop in lube consumption among region’s largest markets.· Germany’s lube demand falls for sixth month in June 2024 from year earlier amid slumping engine oils consumption..· Germany’s rising lube production and exports in H1 2024 could compound slowdown in base oils requirements in other markets in Europe by eroding market share of domestic blenders in those markets..· Challenge of weak domestic lube demand and rising lube supplies from Germany add to incentive for blenders in other markets to maintain lower lube and feedstock inventories..· Germany’s falling lube demand compounds drop in Europe’s lube consumption, which falls in June 2024 for sixth time in seven months..· Europe’s lube consumption of more than 1.15 million tonnes in H1 2024 falls by 9%, or more than 110,000 tonnes from year-earlier levels.· Drop in Europe’s lube demand cushions but still lags the more-than 250,000-tonne fall in Europe’s base oils output in H1 2024, mostly because of plant maintenance work on several premium-grade base oils units.· Any further drop in demand in H2 2024 could match or exceed any drop in output because of more limited maintenance work in coming months..Germany’s June lube demand falls.US’ July base oils exports to Europe fall.Asia base oils demand outlook: Week of 16 Sept.Global base oils margins outlook: Week of 16 Sept
· US base oils demand could ease as lower crude/diesel prices and sufficient supplies incentivize buyers to hold back in anticipation of more price adjustments.· Buyers could cover seasonal pick-up in demand at end-Q3 with inventories built up earlier, curbing requirements for additional supplies.· Strength of any seasonal pick-up in demand could anyway be more muted amid sustained slowdown in domestic lube consumption.· Still-high export prices relative to overseas markets could curb demand in outlets like India.· Signs of recent pick-up in shipments to markets like India point to prices at levels that were able to attract sufficient demand.· Demand for Group III base oils likely to get support from competitive prices vs Group II base oils.· Prospect of plentiful Group III supply could give buyers the option of procuring smaller volumes more frequently, curbing any sharp rise in demand. · Latin America’s base oils demand likely to ease as lower prices and improving availability boost attraction of holding off.· Prospect of seasonal slowdown in demand in Q4 2024 gives buyers additional leverage to hold back.· US Group II export price-premium to FOB NE Asia prices starts to narrow slightly in Sept 2024.· Any extension of the trend could prompt buyers in Latin America to target more supplies from US instead of Asia.· Any such move could cushion a slowdown in outright demand..· Chile’s base oils imports fall in Aug 2024 for second month from year earlier; 3-month rolling average imports rise 2% yoy..· Contrasting trends mirror Chile’s economy, which contracted in Q2 2024 before showing signs of improving in Q3 2024.· Any further improvement in economic activity could support pick-up in base oils requirements..· Europe’s Group II base oils demand could improve amid expectations of steadier supply compared with H1 2024.· Still-competitive Group II prices relative to Group I base oils could provide further support, and simultaneously erode demand for Group I base oils.· Any pick-up in Group II base oils demand is likely to be muted, even with seasonal pick-up in requirements at end-Q3, amid sustained drop in lube consumption among region’s largest markets.· Germany’s lube demand falls for sixth month in June 2024 from year earlier amid slumping engine oils consumption..· Germany’s rising lube production and exports in H1 2024 could compound slowdown in base oils requirements in other markets in Europe by eroding market share of domestic blenders in those markets..· Challenge of weak domestic lube demand and rising lube supplies from Germany add to incentive for blenders in other markets to maintain lower lube and feedstock inventories..· Germany’s falling lube demand compounds drop in Europe’s lube consumption, which falls in June 2024 for sixth time in seven months..· Europe’s lube consumption of more than 1.15 million tonnes in H1 2024 falls by 9%, or more than 110,000 tonnes from year-earlier levels.· Drop in Europe’s lube demand cushions but still lags the more-than 250,000-tonne fall in Europe’s base oils output in H1 2024, mostly because of plant maintenance work on several premium-grade base oils units.· Any further drop in demand in H2 2024 could match or exceed any drop in output because of more limited maintenance work in coming months..Germany’s June lube demand falls.US’ July base oils exports to Europe fall.Asia base oils demand outlook: Week of 16 Sept.Global base oils margins outlook: Week of 16 Sept
