· Asia’s base oils demand likely to get support from signs of tighter supply and rising prices.
· Asia’s more muted lubricants consumption likely to complicate blenders’ procurement plans as they seek to manage inventories carefully.
· China’s base oils demand shows signs of staying weaker than usual; southeast Asia’s demand likely to hold steady; India’s demand for Asia supplies could rise amid slowdown in arb shipments from other markets.
· China’s base oils demand likely to stay relatively muted even as peak seasonal demand period approaches.
· Prospect of pick-up in China’s domestic base oils production in September gives blenders the leverage to continue to procure supplies as and when required.
· Surge in Taiwan’s base oils exports to China in August point to blenders’ and distributors’ moves to replenish stocks ahead of seasonal pick-up in demand.
· Trend continues at slower pace in September amid drop in shipments from Taiwan and amid less feasible arbitrage to China.
· Taiwan's base oils exports slow down in September ahead of plant shutdown in October.
· Trend also suggests either China’s domestic supply is sufficient to cover more requirements, or that domestic blenders face weaker-than-usual seasonal rise in demand.
· China’s base oils supply surplus over India’s base oils supply falls in July to narrowest in years.
· China’s excess base oils supply and demand over India likely to continue to narrow in face of rising production and demand in India.
· Philippines’ July base oils/lube imports fall at fastest pace in more than two years.
· Fall in shipments adds to signs of more widespread slowdown in demand in southeast Asia.
· Philippines’ falling imports from Singapore and rising shipments from South Korea extend trend of diverging flows from those two suppliers in different markets.
· Southeast Asia’s July lube demand falls for fourth time in five months, reflecting slowdown in markets like Philippines.
· Lower consumption contrasts with stronger demand last year and appears to curb region’s ability to balance out slower demand in China.
· But region’s outright lube consumption this year remains much higher than in first seven months of 2021, reflecting its increasingly instrumental role in Asia market.
· India’s August lube demand rises to five-month high, reverses slower consumption in early 2023.
· Firmer demand consumes more base oils feedstock supplies and curbs blenders’ ability to build stocks ahead of typical seasonal rise in consumption from end of Q3 2023.
· Trend likely to support sustained demand from blenders for additional base oils supplies.
· India’s stronger lube consumption contrasts with slide in base oils imports to seven-month low in August.
· Imports likely to revive following restart of key base oils plant in South Korea after maintenance work.
· But imports likely to get smaller boost from arbitrage shipments amid slowdown in flows from US and Taiwan.
· India’s imports of Group II base oils stay unusually high in July and August, reflecting more limited impact of South Korea’s plant maintenance work on Group II supplies.
· Prospect of fall in Group II shipments from US and Taiwan likely to trigger drop in India’s total Group II imports.
· Fall in arbitrage flows likely to give more regular suppliers more leverage over prices.
· Pakistan’s July lube demand rises for first time in five months amid signs of steadier economic activity.
· Any revival in Pakistan’s lube consumption would likely boost base oils demand from overseas sources, especially South Korea and Singapore.