· Diesel premium to crude stays unusually firm after strong rebound in August.· India retail diesel premium to crude rises, still unusually low – incentivizes refiners to boost base oils output..· China’s Shandong province diesel premium to crude extends surge, incentivises refiners to maximise diesel output..· US, Japan refinery run rates hold firm, China Shandong run rates lower.· Global plant maintenance activity to pick-up after summer lull.· Prospect of refinery run cuts in markets like Asia likely to add to drop in surplus supply.· Ongoing/upcoming maintenance work in US, Europe, and Asia-Pacific curb surplus supply.· Closure of Japanese base oils unit in coming weeks likely to impact trade flows.· Sustained slowdown in Mideast Gulf Group III base oils supplies in 1H 2022 suggest lower run rates or plant maintenance..· US supply buffer in case of weather-related damage likely to be cut if/as concerns wane.· Any such move unlikely for now amid expectations hurricane season to get busier over coming weeks.· Supply preparations ahead of planned maintenance in US could limit extent of US surplus/drawdown of supply buffer.· Thailand’s surplus supply could be more muted ahead of maintenance work/signs of firm domestic demand.· China’s base oils production likely fell even more in August.· Indonesia’s Group I supply surplus for export likely to stay limited amid firm domestic demand.· Steady flow of Asia shipments continues to be lined up for distant markets, clearing surplus.· India takes delivery of unusually large volume of cargoes from Taiwan in August.· India takes delivery of more Group I/II light grades of Chinese origin in August.· Singapore 4-week avg base oils exports hold in narrow, low range, well below pre-pandemic levels.· Singapore 4-week avg base oils exports to China hold close to 2-month high.· Singapore 4-week avg base oils imports from Japan stay higher than usual.· Japan supplies account for larger-than-usual share of Singapore’s imports in recent months..· Flows from Japan likely to change following closure of Japanese Group I plant.· Pause in shipments from Europe to Singapore extends into fourth month.· Taiwan’s August base oils exports rise, volume to China stays low.· Large volume of Taiwan cargoes moves to SE Asia in recent weeks..Global base oils – week of Sep 5: Demand outlook
