· Seasonal rise in US base oils demand likely to be more muted as concern about economic slowdown incentivizes blenders to maintain lower stocks.· Weak demand and rising surplus supply typically puts more pressure on export prices before domestic prices.· US base oils domestic prices instead fall while export prices hold steady so far in April 2025.· Weaker domestic demand boosts importance of firm buying interest from overseas markets to avoid build-up of surplus supplies.· Buying interest from overseas markets could get more challenging amid concern about weaker economic growth and expectations of improving base oils supply from Asia..· Concern about tariff-related supply disruptions could incentivize Latin America’s buyers to trim their reliance on US, the source of most of their imports currently.· Tighter supply and firm prices for US light-grade base oils add to buyers' incentive to seek light grades from other markets like Asia.· Asia’s Group II light-grade price discount to US export prices starts to widen in H2 April 2025, after narrowing in recent months..· South Korea’s base oils exports in March 2025 include large cargo to Brazil..· Cargo is second such large shipment to Brazil in past four months.· Any further widening of Asia Group II light-grade price-discount to US prices could trigger pick-up in such flows..· Latin America’s base oils demand could stay weaker than usual as fall in lube demand gathers pace in markets like Mexico.· Demand falls as uncertainty about timing and extent of US tariffs compounds weak or slowing economic growth in key markets in Latin America.· Mexico’s lube demand falls in Feb 2025 for fourth month and at fastest pace in eight months..· Lube demand falls amid 19% slump in consumption of industrial oils.· Chile’s base oils/lube imports rebound in March 2025, balancing out slump in shipments in Feb 2025.· Chile’s base oils imports still fall in three months to March 2025 from year earlier for second month in a row..· Slowdown in shipments coincides with drop in Chile’s economic activity in Feb 2025 for first time in eight months..· Europe’s base oils demand likely to stay cautious amid uncertainty about economic outlook and signs of still-weak lube consumption.· Lower crude oil prices, firm base oils margins and healthy availability of supply of most grades incentivize blenders to maintain low stocks.· Lack of any sustained recovery in lube consumption adds to attraction of holding lower inventories.· Spain’s lube demand falls in Feb 2025 from year earlier after rising in each of the previous two months.· Contraction mirrors similar slowdown in Italy’s lube demand, adding to dip in consumption in key European markets..· Europe’s Group III base oils price-differential vs Group I and Group II base oils stays unusually narrow..· Competitive Group III prices could support firmer demand for the premium-grade supplies..· Demand in Middle East for Group II base oils could get support after South Korea’s exports to UAE fall sharply in March 2025..· Dip in shipments points to tighter availability of surplus supplies in late-Q1 2025.· Dip in shipments coincides with Group II plant maintenance in South Korea.· Buyers could prefer to hold back and tap existing stocks for now in face of lower crude oil prices and expectations of improving availability of supply in coming weeks..Asia base oils demand outlook: Week of 21 April.Global base oils margins outlook: Week of 21 April.Global base oils arb outlook: Week of 21 April.S Korea’s March exports to US edge down
· Seasonal rise in US base oils demand likely to be more muted as concern about economic slowdown incentivizes blenders to maintain lower stocks.· Weak demand and rising surplus supply typically puts more pressure on export prices before domestic prices.· US base oils domestic prices instead fall while export prices hold steady so far in April 2025.· Weaker domestic demand boosts importance of firm buying interest from overseas markets to avoid build-up of surplus supplies.· Buying interest from overseas markets could get more challenging amid concern about weaker economic growth and expectations of improving base oils supply from Asia..· Concern about tariff-related supply disruptions could incentivize Latin America’s buyers to trim their reliance on US, the source of most of their imports currently.· Tighter supply and firm prices for US light-grade base oils add to buyers' incentive to seek light grades from other markets like Asia.· Asia’s Group II light-grade price discount to US export prices starts to widen in H2 April 2025, after narrowing in recent months..· South Korea’s base oils exports in March 2025 include large cargo to Brazil..· Cargo is second such large shipment to Brazil in past four months.· Any further widening of Asia Group II light-grade price-discount to US prices could trigger pick-up in such flows..· Latin America’s base oils demand could stay weaker than usual as fall in lube demand gathers pace in markets like Mexico.· Demand falls as uncertainty about timing and extent of US tariffs compounds weak or slowing economic growth in key markets in Latin America.· Mexico’s lube demand falls in Feb 2025 for fourth month and at fastest pace in eight months..· Lube demand falls amid 19% slump in consumption of industrial oils.· Chile’s base oils/lube imports rebound in March 2025, balancing out slump in shipments in Feb 2025.· Chile’s base oils imports still fall in three months to March 2025 from year earlier for second month in a row..· Slowdown in shipments coincides with drop in Chile’s economic activity in Feb 2025 for first time in eight months..· Europe’s base oils demand likely to stay cautious amid uncertainty about economic outlook and signs of still-weak lube consumption.· Lower crude oil prices, firm base oils margins and healthy availability of supply of most grades incentivize blenders to maintain low stocks.· Lack of any sustained recovery in lube consumption adds to attraction of holding lower inventories.· Spain’s lube demand falls in Feb 2025 from year earlier after rising in each of the previous two months.· Contraction mirrors similar slowdown in Italy’s lube demand, adding to dip in consumption in key European markets..· Europe’s Group III base oils price-differential vs Group I and Group II base oils stays unusually narrow..· Competitive Group III prices could support firmer demand for the premium-grade supplies..· Demand in Middle East for Group II base oils could get support after South Korea’s exports to UAE fall sharply in March 2025..· Dip in shipments points to tighter availability of surplus supplies in late-Q1 2025.· Dip in shipments coincides with Group II plant maintenance in South Korea.· Buyers could prefer to hold back and tap existing stocks for now in face of lower crude oil prices and expectations of improving availability of supply in coming weeks..Asia base oils demand outlook: Week of 21 April.Global base oils margins outlook: Week of 21 April.Global base oils arb outlook: Week of 21 April.S Korea’s March exports to US edge down
