· Asia’s base oils demand likely to get support from seasonal pick-up in lube demand, signs of limited supply surplus, and steady-to-firmer prices.· Regional blenders likely to be wary about building large stocks amid uncertainty about impact of China’s slower growth on economic prospects in wider region..· Asia’s lube demand set to rise in coming months as seasonal pick-up in consumption outweighs slower economic growth..· Firmer lube consumption could have larger impact on base oils demand after blenders sought to maintain lower inventories.· Firmer demand and signs of more limited base oils supply surplus curb prospect of exposure to lower prices.· Removal of such concerns, and instead the prospect of steady-to-higher prices, typically boost base oils demand. .· China’s base oils demand stays muted throughout month of August.· Narrower domestic Chinese price premium to regional cargo prices points to limited moves to seek additional supplies.· China’s July base oils imports fall to eleven-month low in latest sign of country’s weaker-than-expected demand..· China’s notional base oils demand falls to five-month low in July, highlighting the slowdown in activity..· Fall in China’s domestic base oils supply and muted domestic demand in August suggests buyers wary that seasonal pick-up in demand in final weeks of third quarter may be weaker than usual.· Buyers’ preference to maintain low stocks leaves them facing tight availability if demand exceeds their expectations..· Singapore’s weekly base oils exports to Indonesia outpace shipments to China throughout Q3 2023 amid signs of more regular rather than occasional trend..· Singapore’s persistently higher exports to southeast Asia this year contrast with slowdown in shipments to India in Q3 2023..· India’s Group III 4cst base oils imports hold firm in July even as 8cst base oils shipments slump..· Shutdown of key Group III base oils unit in South Korea in May-July 2023 shows signs of impacting 8cst supplies to India more than 4cst supplies.· Trend reflects India’s firm demand for Group III 4cst supplies, and more superficial interest in 8cst supplies when prices are competitive.· Trend suggests India’s imports of Group III 4cst and 8cst supplies likely to rise following completion of plant maintenance in South Korea..· India’s retail diesel premium to cfr India very-light grade base oil prices stays high even as it edges lower..· Retail diesel premium to cfr India base oil prices faces prospect of narrowing if refiners trim supply of light grades.· Such a scenario could support firmer base oils demand in the interim..Global base oils - week of Aug 28: Price outlook - arbitrage
