· Europe’s Group II prices stay unusually competitive vs Group I prices.· Outperformance of Europe Group I prices vs Group I and Group III prices in recent months reflects change in supply-demand dynamics that show signs of being longer-term structural changes.· Prospect of increasingly tighter Group I base oils supply likely to provide further price support vs premium-grade prices.· Trend mirrors similar pattern in Asia several years ago – that prompted more widespread adoption of Group II base oils.· Wider unapproved Europe Group III price discount to approved Group III prices boosts attraction for blenders to minimize usage of supplies with approvals.· Asia’s Group I SN 150 price maintains steep discount to SN 500 and to Group II N150.· Steep discount contrasts with narrow Group I SN 500 discount to Group II heavy grades.· China’s domestic Group I prices stay firm relative to Group II prices – reflecting plentiful supply of Group II and incentivizing blenders to minimize Group I consumption.· China’s domestic Group II light-grade price discount to prices for imported supplies widens, boosting attraction of procuring more domestic supplies..Global base oils – week of June 26: Price outlook - margins
· Europe’s Group II prices stay unusually competitive vs Group I prices.· Outperformance of Europe Group I prices vs Group I and Group III prices in recent months reflects change in supply-demand dynamics that show signs of being longer-term structural changes.· Prospect of increasingly tighter Group I base oils supply likely to provide further price support vs premium-grade prices.· Trend mirrors similar pattern in Asia several years ago – that prompted more widespread adoption of Group II base oils.· Wider unapproved Europe Group III price discount to approved Group III prices boosts attraction for blenders to minimize usage of supplies with approvals.· Asia’s Group I SN 150 price maintains steep discount to SN 500 and to Group II N150.· Steep discount contrasts with narrow Group I SN 500 discount to Group II heavy grades.· China’s domestic Group I prices stay firm relative to Group II prices – reflecting plentiful supply of Group II and incentivizing blenders to minimize Group I consumption.· China’s domestic Group II light-grade price discount to prices for imported supplies widens, boosting attraction of procuring more domestic supplies..Global base oils – week of June 26: Price outlook - margins