· Group II heavy-grade base oils prices outperform most other grades in global market in 2024.· Group III 4cSt prices lag most other grades in global market in 2024..· Gap between US Group II heavy grades and Group III 4cSt base oils grows in 2024 to widest in at least eight years.· Outperformance of Group II heavy-grade prices reflects combination of steady-to-tight supply combined with rising demand in place of Group I heavy neutrals.· Price-weakness of Group III 4cSt base oils partly reflects impact of rising Group III base oils supply, especially in US and China.· Rising domestic supply curbs demand for overseas shipments in markets where lube consumption is already weak.· In US, unusually high base oils exports and firm US Group II light-grade prices are key trends in 2024..· High US base oils exports help to balance out weakness of domestic demand, curbing any build-up of surplus supplies so far this year..· Tight supply supports high US Group II light-grade prices, slashing their discount to US Group II heavy-grade prices and Group III 4cSt prices..· Tight supply and high US Group II light-grade prices curb flow of arbitrage shipments to markets like India since Q2 2024. .· In Europe, firm Group I base oils prices are key trend in 2024.· Firm Group I base oils prices reflect expectations of tighter supply following plant closure in Itay in H1 2024.· Firm Group I prices make less feasible the arbitrage to outlets like West Africa and Middle East even as outright prices fall in Nov-Dec 2024..· Firm Group I prices attract more base oils supplies from other markets to Europe..· Rise in imports and firm output support steady supply of Group I base oils, which remains the largest base oils grade in first nine months of 2024..· Steady Group I supply contrasts with dip in Group II and Group III base oils supply..· In Asia, lower base oils supply is key trend in 2024.· Base oils supply falls more than in other regions in 2024..· Lower supply contrasts with rise in Asia's lube demand in 2024..· Tighter supply-demand fundamentals cut surplus supply, support unusually firm base oils margins for products like Group I brightstock and Group II N500..· Tighter fundamentals attract regular flow of shipments from US and Europe to Asia, curb volume of arbitrage flows from Asia to Americas and Europe.· Same key trends in US, Europe and Asia likely to extend well into start of 2025.· New production capacity in Asia likely to disrupt those trends during 2025.· Even with smooth start-up of new capacity in Asia, global markets unlikely to see major impact until well into 2025..Global base oils margins outlook: Week of 16 Dec.Asia base oils demand outlook: Week of 16 Dec.Asia base oils supply outlook: Week of 16 Dec
· Group II heavy-grade base oils prices outperform most other grades in global market in 2024.· Group III 4cSt prices lag most other grades in global market in 2024..· Gap between US Group II heavy grades and Group III 4cSt base oils grows in 2024 to widest in at least eight years.· Outperformance of Group II heavy-grade prices reflects combination of steady-to-tight supply combined with rising demand in place of Group I heavy neutrals.· Price-weakness of Group III 4cSt base oils partly reflects impact of rising Group III base oils supply, especially in US and China.· Rising domestic supply curbs demand for overseas shipments in markets where lube consumption is already weak.· In US, unusually high base oils exports and firm US Group II light-grade prices are key trends in 2024..· High US base oils exports help to balance out weakness of domestic demand, curbing any build-up of surplus supplies so far this year..· Tight supply supports high US Group II light-grade prices, slashing their discount to US Group II heavy-grade prices and Group III 4cSt prices..· Tight supply and high US Group II light-grade prices curb flow of arbitrage shipments to markets like India since Q2 2024. .· In Europe, firm Group I base oils prices are key trend in 2024.· Firm Group I base oils prices reflect expectations of tighter supply following plant closure in Itay in H1 2024.· Firm Group I prices make less feasible the arbitrage to outlets like West Africa and Middle East even as outright prices fall in Nov-Dec 2024..· Firm Group I prices attract more base oils supplies from other markets to Europe..· Rise in imports and firm output support steady supply of Group I base oils, which remains the largest base oils grade in first nine months of 2024..· Steady Group I supply contrasts with dip in Group II and Group III base oils supply..· In Asia, lower base oils supply is key trend in 2024.· Base oils supply falls more than in other regions in 2024..· Lower supply contrasts with rise in Asia's lube demand in 2024..· Tighter supply-demand fundamentals cut surplus supply, support unusually firm base oils margins for products like Group I brightstock and Group II N500..· Tighter fundamentals attract regular flow of shipments from US and Europe to Asia, curb volume of arbitrage flows from Asia to Americas and Europe.· Same key trends in US, Europe and Asia likely to extend well into start of 2025.· New production capacity in Asia likely to disrupt those trends during 2025.· Even with smooth start-up of new capacity in Asia, global markets unlikely to see major impact until well into 2025..Global base oils margins outlook: Week of 16 Dec.Asia base oils demand outlook: Week of 16 Dec.Asia base oils supply outlook: Week of 16 Dec
