· Asia Group I bright stock prices extend rise vs other regions and vs feedstock/competing fuel prices in early 2024, ICIS data shows.· Asia bright stock prices extend rise as demand faces seasonal pick-up and supply gets even tighter.· Asia’s tighter supply-demand fundamentals for bright stock contrast with more plentiful supply in other regions like Europe.· Shipments from Europe to Mideast Gulf or India face logistical complications or delays, compounding supply tightness in Asia-Pacific region.· Asia’s Group I bright stock supply tightens in Q1 2024 because of plant maintenance work in Thailand, structural drop in output in Japan and limited arbitrage flows from Europe.· Thailand’s base oils output already falls to thirteen-month low at end-2023 ahead of plant shutdowns in Jan 2024..· Japan’s base oils exports extend fall at end-2023 to second lowest in more than a decade..· Fall in exports follows Group I plant closure in Japan in Q4 2023..· Tighter supply coincides with seasonal pick-up in demand in markets like China.· China’s domestic bright stock price holds close to highest level vs fob Asia prices in more than a year..· CFR India Group I bright stock premium to fob Asia prices rises in Jan 2024 to three-month high.· India’s Group I bright stock imports already fall to 13-month low in Dec 2023..· Firm demand and tight availability prompt regional buyers to turn to Mideast Gulf and Europe for bright stock supplies.· Availability of some surplus supply triggers slump in Europe’s bright stock export price in Jan 2024.· Fob Europe bright stock export price falls relative to CFR India price to largest discount in more than three years.· Wider price discount makes arbitrage more feasible..· Cargo vessels’ growing avoidance of Red Sea region complicates logistics of moving Group I supplies to India/UAE from suppliers west of the region.· Complicated logistics raise prospect of curbing or delaying shipments from other regions like Europe, or their moving to other markets instead, like West Africa.· Trend raises prospect of prolonging bright stock tightness in Asia-Pacific region until regional supply improves or demand starts to wane.· Asia’s rising bright stock prices raise prospect of speeding up that adjustment in supply-demand dynamics..Global base oils - week of Feb 5: Price outlook - margins
· Asia Group I bright stock prices extend rise vs other regions and vs feedstock/competing fuel prices in early 2024, ICIS data shows.· Asia bright stock prices extend rise as demand faces seasonal pick-up and supply gets even tighter.· Asia’s tighter supply-demand fundamentals for bright stock contrast with more plentiful supply in other regions like Europe.· Shipments from Europe to Mideast Gulf or India face logistical complications or delays, compounding supply tightness in Asia-Pacific region.· Asia’s Group I bright stock supply tightens in Q1 2024 because of plant maintenance work in Thailand, structural drop in output in Japan and limited arbitrage flows from Europe.· Thailand’s base oils output already falls to thirteen-month low at end-2023 ahead of plant shutdowns in Jan 2024..· Japan’s base oils exports extend fall at end-2023 to second lowest in more than a decade..· Fall in exports follows Group I plant closure in Japan in Q4 2023..· Tighter supply coincides with seasonal pick-up in demand in markets like China.· China’s domestic bright stock price holds close to highest level vs fob Asia prices in more than a year..· CFR India Group I bright stock premium to fob Asia prices rises in Jan 2024 to three-month high.· India’s Group I bright stock imports already fall to 13-month low in Dec 2023..· Firm demand and tight availability prompt regional buyers to turn to Mideast Gulf and Europe for bright stock supplies.· Availability of some surplus supply triggers slump in Europe’s bright stock export price in Jan 2024.· Fob Europe bright stock export price falls relative to CFR India price to largest discount in more than three years.· Wider price discount makes arbitrage more feasible..· Cargo vessels’ growing avoidance of Red Sea region complicates logistics of moving Group I supplies to India/UAE from suppliers west of the region.· Complicated logistics raise prospect of curbing or delaying shipments from other regions like Europe, or their moving to other markets instead, like West Africa.· Trend raises prospect of prolonging bright stock tightness in Asia-Pacific region until regional supply improves or demand starts to wane.· Asia’s rising bright stock prices raise prospect of speeding up that adjustment in supply-demand dynamics..Global base oils - week of Feb 5: Price outlook - margins