· Asia’s base oils demand likely to be relatively firm amid signs of pick-up in consumption in southeast Asia, seasonal rise in demand in India.· China’s still-muted consumption likely to have smaller impact as Asia refiners target other markets.· Chinese blenders likely to continue to procure smaller volumes amid expectations of increasingly plentiful domestic supply and expectations that prices are more likely to fall than rise.· China’s rising domestic Group II price premium to diesel prices points to firmer demand or tighter supply.· China’s domestic Group II price premium to fob Asia prices stays unusually low, pointing to muted demand for overseas supplies..· China’s October domestic Group II base oils output falls to seven-month low..· Output falls despite slump in Taiwan’s base oils exports to China in October because of plant maintenance work.· Weak domestic base oils prices keep arbitrage shut, adding to pressure on supply.· Lack of any upward price-pressure points to slack demand for Group II base oils.· Rise in China's base oils supply in September, and need to clear those stocks, could add to pressure on demand..· Singapore’s base oils imports from China surge in four weeks to 1 November to highest in more than a year..· Rise in shipments points to plentiful surplus supply in China.· Plentiful surplus supply in China reflects weak demand and low prices, boosting attraction of exports..· Japan’s September base oils/lube demand rises to one-year high on seasonal pick-up in consumption..· Demand falls from year-earlier levels but still holds at third-highest level in past decade.· Firm demand coincides with rising auto lube consumption, slower drop in industrial oils consumption.· Firm consumption suggests slowdown in Japan’s industrial production in Q3 2023 could be short-lived.· Firm consumption absorbs more of Japan’s base oils supply, curbing availability for other markets..· Singapore’s base oils exports to southeast Asia and China hold firm over past four weeks to 1 Nov 2023, contrasting with slide in shipments to India..· Shipments to India dip even amid seasonal pick-up in demand in the country.· India also set to face slowdown in exports from Taiwan to the country in October, and still-closed arbitrage from US.· Trend boosts India’s reliance on October-loading shipments from South Korea and Mideast Gulf.· Shipments to India show signs of rising from both of those sources in Oct 2023..· India’s lower base oils supply in Sep 2023 contrasts with firm demand.· Supply lags demand for a second month in response..· Base oils supply shortfall curbs Indian buyers’ opportunity to replenish stocks ahead of seasonal pick-up in demand in Q4 2023.· Supply shortfall forces buyers to instead tap their existing stocks, cutting their inventories.· Supply shortfall curbs Indian buyers’ opportunity to replenish stocks ahead of rise in imported base oils prices in Q4 2023.· Supply shortfall reduces buyers’ leverage to push back against sellers’ higher price offers for supplies in Q4 2023.· Prospect of unexpected revival in US arbitrage shipments to India gives buyers more price leverage.· Any such shipments would be unlikely to arrive until 2H Dec 2023 at earliest.· Narrowing cfr India Group II light-grade premium to fob Asia prices suggests buyers see less urgency to keep arbitrage open from Asia.· Trend could reflect expectations of pick-up in surplus supplies from US. .Global base oils - week of Nov 6: Price outlook - arbitrage.Base Oil News stories and analysis also available on ICIS platform
