· Asia-Pacific base oils demand could get boost in coming weeks from stock-replenishment in China, relatively balanced regional supplies, and expectations that prices are more likely to rise than fall..· Asia’s lube demand likely to rise in Q4 2023 vs Q3 2023, contrasting with slower consumption in Q4 vs Q3 in Europe and Latin America..· Firmer demand likely to absorb more regional supplies, reduce likelihood of significant supply-build.· Firmer demand in Q4 2023 would coincide with plant maintenance in Asia and follow weak base oils margins in Q3 2023..· China’s July base oils imports show signs of falling from June to lowest since start of year.· China’s July base oils imports likely included bright stock cargoes from Thailand.· Bright stock cargoes would be first such shipments from the southeast Asian country to China in four months.· China’s domestic base oils demand likely stays muted in early August even in face of rising crude prices and tighter supply.· Trend raises prospect of stronger pick-up in demand in coming weeks as blenders seek to replenish low stocks ahead of seasonal rise in lube consumption at end Q3/early Q4 2023.· China’s July automobile sales fall from June and yoy; alternative-fuel vehicle sales edge down from June, surge yoy.· China’s July automobile sales face pressure from seasonal slowdown, support from stimulus measures..· Japan’s Q2 base oils/lube demand holds firm as recovery in automobile lubricants starts to extend to industrial oils..· Steady-to-firm demand adds to similar signs in several markets in southeast Asia, curbing prospect of large build-up of surplus base oils supply in region during Q3 2023..· Singapore’s sustained slowdown in weekly base oils exports to China contrasts with rising shipments to Indonesia..· Dynamic reflects signs of firmer demand growth in Indonesia and steady-to-lower consumption in China.· Shipment of more supplies from Hong Kong to Singapore last week could reflect diversion of supplies originally bound for China..· India’s retail diesel price premium to imported very-light grade base oils widens to highest since February 2022..· India’s demand for very-light grade base oils typically rises when diesel premium to base oils prices widens.· Seasonal rise in demand in Q4 2023, prospect of higher prices, and prospect of tighter supplies of very-light grade base oils could support firmer Indian demand..Global base oils - week of Aug 7: Price outlook - margins
· Asia-Pacific base oils demand could get boost in coming weeks from stock-replenishment in China, relatively balanced regional supplies, and expectations that prices are more likely to rise than fall..· Asia’s lube demand likely to rise in Q4 2023 vs Q3 2023, contrasting with slower consumption in Q4 vs Q3 in Europe and Latin America..· Firmer demand likely to absorb more regional supplies, reduce likelihood of significant supply-build.· Firmer demand in Q4 2023 would coincide with plant maintenance in Asia and follow weak base oils margins in Q3 2023..· China’s July base oils imports show signs of falling from June to lowest since start of year.· China’s July base oils imports likely included bright stock cargoes from Thailand.· Bright stock cargoes would be first such shipments from the southeast Asian country to China in four months.· China’s domestic base oils demand likely stays muted in early August even in face of rising crude prices and tighter supply.· Trend raises prospect of stronger pick-up in demand in coming weeks as blenders seek to replenish low stocks ahead of seasonal rise in lube consumption at end Q3/early Q4 2023.· China’s July automobile sales fall from June and yoy; alternative-fuel vehicle sales edge down from June, surge yoy.· China’s July automobile sales face pressure from seasonal slowdown, support from stimulus measures..· Japan’s Q2 base oils/lube demand holds firm as recovery in automobile lubricants starts to extend to industrial oils..· Steady-to-firm demand adds to similar signs in several markets in southeast Asia, curbing prospect of large build-up of surplus base oils supply in region during Q3 2023..· Singapore’s sustained slowdown in weekly base oils exports to China contrasts with rising shipments to Indonesia..· Dynamic reflects signs of firmer demand growth in Indonesia and steady-to-lower consumption in China.· Shipment of more supplies from Hong Kong to Singapore last week could reflect diversion of supplies originally bound for China..· India’s retail diesel price premium to imported very-light grade base oils widens to highest since February 2022..· India’s demand for very-light grade base oils typically rises when diesel premium to base oils prices widens.· Seasonal rise in demand in Q4 2023, prospect of higher prices, and prospect of tighter supplies of very-light grade base oils could support firmer Indian demand..Global base oils - week of Aug 7: Price outlook - margins