· Asia-Pacific base oils demand likely to get support from expectations of tighter surplus supply and firm-to-higher prices over coming weeks.
· Prospect of seasonal pick-up in end-user lube demand adds to buyers’ base oils requirements.
· Strength of seasonal pick-up in lube demand shows signs of being more muted than usual, incentivizing blenders to procure sufficient supplies to cover requirements only.
· Any such trend would likely limit extent of any rise in prices.
· China’s demand for regional base oils supplies shows signs of slowing in September after picking up in August.
· China’s passenger car sales edge up in August year-on-year, lag the ongoing surge in alternative-vehicle sales.
· Base oils demand in southeast Asia likely to be more mixed but remain firmer than usual.
· Singapore’s base oils exports over last four weeks rise close to six-month high on the back of synchronised pick-up in shipments to China, Indonesia and India.
· Higher-than-usual shipments to India and Indonesia balance out lower-than-usual volumes to China.
· Extension of that trend would cushion impact of slower demand from China.
· Southeast Asia’s base oils imports fall in July and in first seven months of the year.
· Asia refiners’ July base oils exports to southeast Asia follow similar pattern.
· Trend could curb southeast Asia’s role as counterbalance against weaker Chinese demand.
· Base oils volumes in southeast Asia in 2023 remain substantially higher than in 2021 – reflecting how refiners have already cut sharply their exposure to China.
· Still, southeast Asia’s growing market as outlet for regional base oils supplies increases the impact of any slowdown in demand in the region.
· Thailand’s domestic base oils demand falls in July to lowest in more than a decade.
· Trend reflects combination of rising domestic consumption of premium-grade base oils and falling outright lube demand, especially of industrial oils.
· Thailand’s July engine oils demand rises for first time in four months, contrasting with ongoing slide in industrial oils consumption.
· Trend increases importance of export markets to maintain Thailand's base oil supply-demand balance.
· Thailand’s July base oils exports maintain higher-than-usual share of country’s total demand.
· Extension of trend could help counter likely drop in base oils exports from Japan over coming months.
· India’s base oils demand likely to hold firm ahead of/during festivals season, boosting need to attract more overseas supplies and to keep arbitrage open.
· India’s retail diesel price premium to imported prices for very-light grade base oils falls to narrowest in eleven months.
· Trend likely to limit size of Indian buyers’ requirements for very light grade base oils.
· India’s base oils imports show signs of falling in August from previous month, partly because of slowing arbitrage shipments from US.
· Other arbitrage shipments in August include more supplies of bright stock from Thailand and larger-than-usual volumes of light grades from China.
· India’s August automobile sales rise for seventh time in eight months, with demand for three-wheelers climbing to record-high levels.
· Prospect of lower-than-usual monsoon rains could impact automobile demand in rural market.