· Global Group II heavy-grade base oils prices stay at elevated levels relative to feedstock and competing fuel prices..· Group II heavy-grade prices maintain steep premium to Group I heavy-neutrals prices in Asia and especially in Europe..· Group II heavy-grade price-strength extends to markets like India, even with recent strength in Group I prices in that market..· Group II heavy-grade price-strength points to persistently tight supply and firm demand fundamentals.· Group II heavy-grade price-strength could face pressure in response to any improvement in supply and/or drop in demand.· In Europe, recent rise in Group II heavy-grade price premium to Group I base oils coincides with round of Group I plant-maintenance, tightening availability of Group I heavy neutrals.· Availability of Group I base oils likely to improve following completion of plant-maintenance in markets like Italy and Poland.· Italy’s base oils output pauses in March 2025 before beginning recovery in April 2025 following completion of maintenance work..· Any recovery in supply of Group I heavy neutrals, combined with its steep discount to Group II heavy grades, could spur pick-up in demand for Group I supplies..· In India, demand for overseas supplies of Group II heavy grades gets support from tighter domestic supply during round of plant maintenance.· India’s Group II heavy-grade imports rise to multi-year high in May 2025, reflecting that dynamic..· India’s domestic supply likely to improve following expected completion of plant-maintenance work by start of Q3 2025.· India’s imports of Group I heavy neutrals fall to five-month low in May 2025, adding to demand for Group II heavy grades.· Any extended drop in supplies of Group I heavy neutrals from Iran could sustain additional buying interest in Group II heavy grades.· Resolution of Israel-Iran conflict for now eases prospect of such a scenario..· In Asia, regional Group II base oils supply likely to extend recovery at same time as demand faces seasonal slowdown over coming months..· Any softening of Group II heavy-grade supply-demand fundamentals in Europe and Asia could put pressure on current price levels.· Any such scenario could in turn put pressure on US Group II heavy-grade export prices to respond in kind in order to keep open the arbitrage from US to markets like Europe and India..Global base oils margins outlook: Week of 30 June.India’s May heavy-grade base oils imports mixed.Asia base oils supply outlook: Week of 30 June
