· Europe’s exports of Group I base oils to southeast Asia rise strongly so far this year, despite closed arbitrage during most of that period.· Europe’s exports of Group I base oils to Middle East fall amid even less feasible arbitrage to that region..· Change in cargo flows from Europe to Asia and to Middle East coincides with sustained weakness of Middle East Group I SN 500 price relative to FOB Asia price.· Change in cargo flows could also point to differing objectives for each of those markets.· Unusually large cargo of Group I base oils loads from Italy in July 2024 before heading to Singapore; shipment arrives in Sept 2024.· Cargo adds to sustained pick-up in shipments from Europe to Singapore so far this year..· Europe’s base oils exports to Middle East also rise strongly in July 2024..· Composition of those shipments changes markedly from recent years, with slump in supplies from Italy and UK and surge in supplies from Netherlands..· Italy and UK are key producers of Group I base oils in Europe; Netherlands is the sole source of virgin Group II base oils in Europe..· Rise in Group I shipments from Europe to southeast Asia follows and helps to cushion impact of closure of two plants in Japan in recent years and upcoming closure of a plant in China in Oct 2024.· Rise in Group I shipments to southeast Asia coincides with and helps to cover for sustained pick-up in Singapore’s bunker fuel demand since late last year..· Singapore’s rising bunker-fuel demand points to pick-up in marine lube consumption, and to subsequent pick-up in demand for Group I brightstock to produce marine lubricants..· Fall in Group I shipments from Europe to Middle East partly reflects dwindling availability of spot cargoes in Europe and uncompetitive prices for any spot supplies that are available.· Shrinking bunker fuel demand in Fujairah this year and its smaller size relative to Singapore also curbs the need to move additional Group I term shipments to the region.· The dynamic compounds tight availability of higher-quality Group I supplies in Middle East and incentivizes blenders to speed up switch to alternative grades.· Rise in shipments from Netherlands to Middle East this year could tap such moves.· Any such moves would help to build market share ahead of expected rise in Group II supply in India and southeast Asia in coming year.· Dynamic suggests Europe’s rise in Group I shipments to southeast Asia is focused more on covering existing market requirements.· Dynamic suggests rise in premium-grade shipments from Europe to Middle East is focused more on building market share of future requirements..Global base oils exports to Middle East rise in July.Europe’s July Grp I base oil exports rise.Italy’s July base oils output holds steady .Global base oils margins outlook: Week of 30 Sept.Asia base oils supply outlook: Week of 30 Sept
· Europe’s exports of Group I base oils to southeast Asia rise strongly so far this year, despite closed arbitrage during most of that period.· Europe’s exports of Group I base oils to Middle East fall amid even less feasible arbitrage to that region..· Change in cargo flows from Europe to Asia and to Middle East coincides with sustained weakness of Middle East Group I SN 500 price relative to FOB Asia price.· Change in cargo flows could also point to differing objectives for each of those markets.· Unusually large cargo of Group I base oils loads from Italy in July 2024 before heading to Singapore; shipment arrives in Sept 2024.· Cargo adds to sustained pick-up in shipments from Europe to Singapore so far this year..· Europe’s base oils exports to Middle East also rise strongly in July 2024..· Composition of those shipments changes markedly from recent years, with slump in supplies from Italy and UK and surge in supplies from Netherlands..· Italy and UK are key producers of Group I base oils in Europe; Netherlands is the sole source of virgin Group II base oils in Europe..· Rise in Group I shipments from Europe to southeast Asia follows and helps to cushion impact of closure of two plants in Japan in recent years and upcoming closure of a plant in China in Oct 2024.· Rise in Group I shipments to southeast Asia coincides with and helps to cover for sustained pick-up in Singapore’s bunker fuel demand since late last year..· Singapore’s rising bunker-fuel demand points to pick-up in marine lube consumption, and to subsequent pick-up in demand for Group I brightstock to produce marine lubricants..· Fall in Group I shipments from Europe to Middle East partly reflects dwindling availability of spot cargoes in Europe and uncompetitive prices for any spot supplies that are available.· Shrinking bunker fuel demand in Fujairah this year and its smaller size relative to Singapore also curbs the need to move additional Group I term shipments to the region.· The dynamic compounds tight availability of higher-quality Group I supplies in Middle East and incentivizes blenders to speed up switch to alternative grades.· Rise in shipments from Netherlands to Middle East this year could tap such moves.· Any such moves would help to build market share ahead of expected rise in Group II supply in India and southeast Asia in coming year.· Dynamic suggests Europe’s rise in Group I shipments to southeast Asia is focused more on covering existing market requirements.· Dynamic suggests rise in premium-grade shipments from Europe to Middle East is focused more on building market share of future requirements..Global base oils exports to Middle East rise in July.Europe’s July Grp I base oil exports rise.Italy’s July base oils output holds steady .Global base oils margins outlook: Week of 30 Sept.Asia base oils supply outlook: Week of 30 Sept
