· Seasonal slowdown in demand during Q3 could be more muted than expected amid signs of steadier lube consumption and as higher feedstock costs dampen prospect of lower prices.· Asia’s May lube demand unexpectedly rises for first time in four months amid pick-up in consumption throughout region..· Pick-up in lube demand likely to be more sustainable than other regions like Latin America, where high inflation incentivized consumers to bring forward expenditure.· Pick-up in lube demand could curb buildup of regional base oils supplies during Q3 2023, especially if base oils output holds at lower levels.· Pick-up in regional lube demand could help balance out weaker-than-expected demand from China.· China’s lube demand likely to stay weak over coming weeks even as base oil feedstock costs rise.· China’s base oils demand could get boost in medium term amid prospect of drop in availability/competitiveness of industrial white oils supplies following tax-rule changes.· Taiwan’s June base oils exports to China fall to eleven-month low, reflecting the demand weakness. .· Drop in Taiwan's exports to China triggers rise in shipments to southeast Asia and India and prospect of more such cargoes over coming months..· Surge in Taiwan’s shipments to southeast Asia in Q2 2023 helps to cushion impact of scheduled plant maintenance work in the region during that period.· Rise in Taiwan’s shipments to southeast Asia reflect relatively steady demand in the region, especially compared with China.· Steady flow of shipments from Taiwan moved to Americas in 2022, tapping open arbitrage.· Closed arbitrage to Americas makes that outlet less feasible this year, leaving more supplies for SE Asia, India and Mideast Gulf.· Plant maintenance work in Taiwan later in year unlikely to have impact on export volumes at least for next month.· Plant maintenance work in Taiwan later in year set to coincide with seasonal pick-up in demand in China.· India’s lube demand rises in June for first time in five months..· India’s firmer demand coincides with signs of improvement in lube consumption in southeast Asia.· Steadier consumption in those markets boosts incentive for refiners to target those markets rather than China.· Philippines’ May lube/base oil imports rises for first time in three months, adding to signs that regional slowdown may be bottoming out..· Indonesia’s May base oils imports rebound, adding to signs of firmer demand in southeast Asia.· Southeast Asia’s May base oils imports rise for first time in three months..· Extension of that trend increases incentive for refiners to prioritize regional markets outside China..Global base oils - week of July 17: Price outlook - margins
· Seasonal slowdown in demand during Q3 could be more muted than expected amid signs of steadier lube consumption and as higher feedstock costs dampen prospect of lower prices.· Asia’s May lube demand unexpectedly rises for first time in four months amid pick-up in consumption throughout region..· Pick-up in lube demand likely to be more sustainable than other regions like Latin America, where high inflation incentivized consumers to bring forward expenditure.· Pick-up in lube demand could curb buildup of regional base oils supplies during Q3 2023, especially if base oils output holds at lower levels.· Pick-up in regional lube demand could help balance out weaker-than-expected demand from China.· China’s lube demand likely to stay weak over coming weeks even as base oil feedstock costs rise.· China’s base oils demand could get boost in medium term amid prospect of drop in availability/competitiveness of industrial white oils supplies following tax-rule changes.· Taiwan’s June base oils exports to China fall to eleven-month low, reflecting the demand weakness. .· Drop in Taiwan's exports to China triggers rise in shipments to southeast Asia and India and prospect of more such cargoes over coming months..· Surge in Taiwan’s shipments to southeast Asia in Q2 2023 helps to cushion impact of scheduled plant maintenance work in the region during that period.· Rise in Taiwan’s shipments to southeast Asia reflect relatively steady demand in the region, especially compared with China.· Steady flow of shipments from Taiwan moved to Americas in 2022, tapping open arbitrage.· Closed arbitrage to Americas makes that outlet less feasible this year, leaving more supplies for SE Asia, India and Mideast Gulf.· Plant maintenance work in Taiwan later in year unlikely to have impact on export volumes at least for next month.· Plant maintenance work in Taiwan later in year set to coincide with seasonal pick-up in demand in China.· India’s lube demand rises in June for first time in five months..· India’s firmer demand coincides with signs of improvement in lube consumption in southeast Asia.· Steadier consumption in those markets boosts incentive for refiners to target those markets rather than China.· Philippines’ May lube/base oil imports rises for first time in three months, adding to signs that regional slowdown may be bottoming out..· Indonesia’s May base oils imports rebound, adding to signs of firmer demand in southeast Asia.· Southeast Asia’s May base oils imports rise for first time in three months..· Extension of that trend increases incentive for refiners to prioritize regional markets outside China..Global base oils - week of July 17: Price outlook - margins
