Americas/EMEA base oils - week of Nov 13: Demand outlook

·        Americas’ base oils demand faces prospect of steeper slowdown compared with other regions in coming weeks.

·        US base oils demand likely to face seasonal slowdown that could be steeper than usual.

·        Rise in finished lube prices in US in recent weeks incentivized end-users to bring forward any procurement plans before the price-increases came into effect.

·        Any such moves would have boosted demand in Oct 2023, at expense of consumption in rest of Q4 2023.

·        Lower crude oil prices add to blenders’ incentive to hold back and to minimize inventory levels.

·        US Group II heavy-grade price premium to light grades falls to lowest in more than a year – suggesting weaker supply-demand fundamentals for heavy grades.

·        Brazil’s base oils demand likely to hold firm through Q4 2023 in the face of lower domestic output and firm lube consumption.

·        Argentina’s base oils demand could slow down in Q4 2023 amid rising surplus supply at end-Q3 2023 and slowing lube consumption.

·        Mexico’s base oils demand faces slowdown as new import requirements temporarily slow down flows from US.

·        Demand faces longer-term slowdown amid expectations of drop in shipments of base oils used for the fuel-extender market.

·        Slowdown likely to impact US base oils exports to Mexico, which more than doubled in Sept 2023 from year-earlier levels.

·        Europe’s base oils demand faces seasonal slowdown.

·        Slowdown could be smaller than same time last year, reflecting buyers’ more balanced stocks and signs that drop in regional lube demand may be slowing.

·        Portugal’s September lube demand rises for first time in three months.

·        Firmer demand adds to signs of recovery in Mediterranean region.

·        Firmer lube demand likely to have larger impact on base oils demand in view of blenders’ lower stocks.

·        Firmer demand and lower stocks speed up blenders’ need to replenish inventories more frequently.

·        Turkey’s Group I base oils imports rise in Sept 2023 as shipments from Russia climb to seven-year high.

·        Rise in shipments adds to surge in Turkey’s Group I imports from Russia throughout the past year.

·        Rise in shipments highlights value and importance of Turkey as key outlet for Russia’s base oils supplies.

·        Rise in shipments from Russia highlights benefit for Turkey as buyers secure supplies at discount to prices from other sources.

·        Rise in shipments from Russia this year coincides with rise in shipments from Italy and Greece.

·        Trend boosts Turkey’s total Group I base oils imports in 2023, despite country’s economic challenges.

·        Turkey’s rising base oils supply in 2023 suggests the volumes are being consumed, either through a rise in base oils or lubricants exports or through other means.