· US base oils demand typically rises around this time of the year to meet seasonal pick-up in lube consumption.· Expectations of plentiful supply give buyers the flexibility to procure smaller volumes on a more regular basis, keeping stocks low.· Signs of more posted-price adjustments could prompt buyers to bring forward procurement plans.· Any such moves could tighten supply.· Any sign of tighter supply could incentivize buyers to procure larger volumes.· Still-wide gap between US domestic and export prices points to ongoing supply surplus.· US export prices stay unusually competitive, also pointing to ongoing surplus supply.· Competitive prices sustain firm overseas demand and interest in working arbitrage shipments to multiple destinations.· Latin America’s base oils demand could be more mixed..· Mexico’s January lube demand falls for ninth month on slumping consumption of automobile lubricants..· Mexico’s demand for base oils imports still likely to rise after surplus of US base oils exports to Mexico’s lube consumption almost disappears in Jan 2024..· Trend suggests US exports to Mexico are unlikely to fall any further and would leave the country with a shortage of base oils feedstock supplies if they did..· Brazil’s base oils demand could remain more muted as the country first works down a surge in surplus supplies from late last year and early this year..· Europe’s demand for Group II base oils from US likely to hold firm after US exports to the region extend fall in Jan 2024..· Slowdown in US exports to Europe coincides with Group II plant maintenance in Netherlands in Q1 2024.· Europe’s steep Group II price premium to US export prices keeps arbitrage open, points to ongoing buying interest for additional supplies.· Asia’s rising Group II prices and logistical complications add to Europe’s focus on Group II supplies from US..· Two-tiered recovery in Europe’s lube demand extends into start of 2024.· Lube demand in Spain and Portugal extends rise in Jan 2024, mirroring firm recovery in Italy.. · Sustained recovery contrasts with more muted lube demand in northern Europe.· Rising demand in key Mediterranean markets incentivizes blenders to adjust their strategy of holding lower feedstock inventories.· Prospect of falling supply of Group I base oils in Europe could add to blenders’ incentive to hold larger volumes of those supplies to ensure sufficient availability..· Shipments of Russian origin account for almost half of Turkey’s Group I imports in Jan 2024.· Share of supplies from Russia is largest in fourteen months..· Rising share of supplies from Russia coincides with widening price discount of Russian supplies vs supplies from Europe.· Turkey’s share and volume of Group I supplies from Russia could rise further over coming months if prices in Europe rise and supply falls. · Trend increases importance of Turkey as key outlet for base oils from Russia..· Uganda’s base oils and lube imports fall in January for the second time in three months from year-earlier levels after imports rise strongly in 2023..· Rising imports through most of 2023 coincide with strong economic growth, which is expected to continue this year..Asia base oils demand outlook: Week of March 18.Global base oils margins outlook: Week of March 18.Global base oils arb outlook: Week of March 18.Global base oils cargo flows: Week of March 18
· US base oils demand typically rises around this time of the year to meet seasonal pick-up in lube consumption.· Expectations of plentiful supply give buyers the flexibility to procure smaller volumes on a more regular basis, keeping stocks low.· Signs of more posted-price adjustments could prompt buyers to bring forward procurement plans.· Any such moves could tighten supply.· Any sign of tighter supply could incentivize buyers to procure larger volumes.· Still-wide gap between US domestic and export prices points to ongoing supply surplus.· US export prices stay unusually competitive, also pointing to ongoing surplus supply.· Competitive prices sustain firm overseas demand and interest in working arbitrage shipments to multiple destinations.· Latin America’s base oils demand could be more mixed..· Mexico’s January lube demand falls for ninth month on slumping consumption of automobile lubricants..· Mexico’s demand for base oils imports still likely to rise after surplus of US base oils exports to Mexico’s lube consumption almost disappears in Jan 2024..· Trend suggests US exports to Mexico are unlikely to fall any further and would leave the country with a shortage of base oils feedstock supplies if they did..· Brazil’s base oils demand could remain more muted as the country first works down a surge in surplus supplies from late last year and early this year..· Europe’s demand for Group II base oils from US likely to hold firm after US exports to the region extend fall in Jan 2024..· Slowdown in US exports to Europe coincides with Group II plant maintenance in Netherlands in Q1 2024.· Europe’s steep Group II price premium to US export prices keeps arbitrage open, points to ongoing buying interest for additional supplies.· Asia’s rising Group II prices and logistical complications add to Europe’s focus on Group II supplies from US..· Two-tiered recovery in Europe’s lube demand extends into start of 2024.· Lube demand in Spain and Portugal extends rise in Jan 2024, mirroring firm recovery in Italy.. · Sustained recovery contrasts with more muted lube demand in northern Europe.· Rising demand in key Mediterranean markets incentivizes blenders to adjust their strategy of holding lower feedstock inventories.· Prospect of falling supply of Group I base oils in Europe could add to blenders’ incentive to hold larger volumes of those supplies to ensure sufficient availability..· Shipments of Russian origin account for almost half of Turkey’s Group I imports in Jan 2024.· Share of supplies from Russia is largest in fourteen months..· Rising share of supplies from Russia coincides with widening price discount of Russian supplies vs supplies from Europe.· Turkey’s share and volume of Group I supplies from Russia could rise further over coming months if prices in Europe rise and supply falls. · Trend increases importance of Turkey as key outlet for base oils from Russia..· Uganda’s base oils and lube imports fall in January for the second time in three months from year-earlier levels after imports rise strongly in 2023..· Rising imports through most of 2023 coincide with strong economic growth, which is expected to continue this year..Asia base oils demand outlook: Week of March 18.Global base oils margins outlook: Week of March 18.Global base oils arb outlook: Week of March 18.Global base oils cargo flows: Week of March 18
