· Asia’s base oils demand likely to stay mixed – with cautious demand in China and firmer buying interest in southeast Asia and India.· China’s base oils demand likely to stay muted as blenders maintain low stocks.· Rising domestic supply in China adds to lack of urgency to buy amid expectations that blenders can cover requirements as and when needed.· Demand stays weak at a time of year when lube consumption typically gets a seasonal boost..· South Korea’s September base oils exports to China stay relatively low, even with China’s domestic base oils output staying low..· Trend points to Chinese blenders’ expectations of a muted seasonal pick-up in demand and a preference to maintain low stocks.· Trend raises prospect of slowdown in Chinese blenders’ demand for overseas supplies in final months of the year, especially if domestic supply rises.· Trend raises prospect of more Asia-Pacific supplies continuing to move to other markets rather than to China..· Singapore’s four-week base oils exports to China hold close to typical levels since June, and well below levels in first five months of 2023..· Singapore’s four-week base oils exports to southeast Asia by contrast stay higher than usual.· Firm volumes reflect ongoing divergence of demand trends in China and southeast Asia..· Asia’s August lube demand unexpectedly rises to five-month high, adding to signs of steadier-to-higher consumption since May 2023.· Firmer demand extends to southeast Asia, where consumption rises for first time in three months..· Asia’s stronger-than-expected lube demand in Q3 2023 raises prospect of smaller regional base oils supply surplus in Q3 and Q4 2023..· Indonesia’s August base oils imports rise to seventeen-month high, adding to sharp recovery in supplies vs first four months of 2023..· Rising imports mirror other regional markets like Vietnam, add to signs of improving lube consumption in southeast Asia.· Singapore’s share of Indonesia’s base oils imports continues to rebound, at the expense of South Korea.· Trend adds to benefit for Singapore in face of Indonesia’s rise in total base oils imports..· India’s September base oils imports stay lower than usual amid sliding arbitrage flows from US, muted recovery in shipments from South Korea..· Lower imports in August and September cut India’s supply ahead of seasonal pick-up in demand in fourth quarter of the year..· India’s September imports of light-grade N70 base oils fall to lowest in more than two years on dip in shipments from all its key suppliers..· Slump in imports raises prospect of drop in blenders’ N70 base oils inventories ahead of seasonal pick-up in demand.· Trend raises prospect of rise in demand and prices for overseas supplies of N70 to levels that make shipments to India attractive for overseas producers. · India’s demand for Group II heavy-grade base oils could slow down after unusual surge in imports of the grade in August and in September..· Surge in heavy-grade shipments to India from Asia could reflect weakness of Chinese demand and moves to divert supplies elsewhere..· India’s September imports of Group III 4cst base oils rise to highest in more than two years..· Imports surge to meet rising demand for the premium-grade base oil, increasing importance of India as key outlet for Group III supplies.· India’s demand for Group III base oils faces prospect of change when new domestic production capacity starts operations and production stabilizes..Global base oils - week of Oct 23: Price signals - arbitrage
· Asia’s base oils demand likely to stay mixed – with cautious demand in China and firmer buying interest in southeast Asia and India.· China’s base oils demand likely to stay muted as blenders maintain low stocks.· Rising domestic supply in China adds to lack of urgency to buy amid expectations that blenders can cover requirements as and when needed.· Demand stays weak at a time of year when lube consumption typically gets a seasonal boost..· South Korea’s September base oils exports to China stay relatively low, even with China’s domestic base oils output staying low..· Trend points to Chinese blenders’ expectations of a muted seasonal pick-up in demand and a preference to maintain low stocks.· Trend raises prospect of slowdown in Chinese blenders’ demand for overseas supplies in final months of the year, especially if domestic supply rises.· Trend raises prospect of more Asia-Pacific supplies continuing to move to other markets rather than to China..· Singapore’s four-week base oils exports to China hold close to typical levels since June, and well below levels in first five months of 2023..· Singapore’s four-week base oils exports to southeast Asia by contrast stay higher than usual.· Firm volumes reflect ongoing divergence of demand trends in China and southeast Asia..· Asia’s August lube demand unexpectedly rises to five-month high, adding to signs of steadier-to-higher consumption since May 2023.· Firmer demand extends to southeast Asia, where consumption rises for first time in three months..· Asia’s stronger-than-expected lube demand in Q3 2023 raises prospect of smaller regional base oils supply surplus in Q3 and Q4 2023..· Indonesia’s August base oils imports rise to seventeen-month high, adding to sharp recovery in supplies vs first four months of 2023..· Rising imports mirror other regional markets like Vietnam, add to signs of improving lube consumption in southeast Asia.· Singapore’s share of Indonesia’s base oils imports continues to rebound, at the expense of South Korea.· Trend adds to benefit for Singapore in face of Indonesia’s rise in total base oils imports..· India’s September base oils imports stay lower than usual amid sliding arbitrage flows from US, muted recovery in shipments from South Korea..· Lower imports in August and September cut India’s supply ahead of seasonal pick-up in demand in fourth quarter of the year..· India’s September imports of light-grade N70 base oils fall to lowest in more than two years on dip in shipments from all its key suppliers..· Slump in imports raises prospect of drop in blenders’ N70 base oils inventories ahead of seasonal pick-up in demand.· Trend raises prospect of rise in demand and prices for overseas supplies of N70 to levels that make shipments to India attractive for overseas producers. · India’s demand for Group II heavy-grade base oils could slow down after unusual surge in imports of the grade in August and in September..· Surge in heavy-grade shipments to India from Asia could reflect weakness of Chinese demand and moves to divert supplies elsewhere..· India’s September imports of Group III 4cst base oils rise to highest in more than two years..· Imports surge to meet rising demand for the premium-grade base oil, increasing importance of India as key outlet for Group III supplies.· India’s demand for Group III base oils faces prospect of change when new domestic production capacity starts operations and production stabilizes..Global base oils - week of Oct 23: Price signals - arbitrage