· Europe’s Group III base oils prices stay unusually weak versus gasoil and VGO, versus Group II base oils, and versus US Group III prices, ICIS data shows.· Trend points to falling demand and plentiful Group III base oils supply in Europe.· Weak Chinese Group III base oils consumption, rather than any rise in Chinese production and exports, is exacerbating Europe’s plentiful Group III base oils supply.· Europe’s Group III base oil price premium versus VGO slumps from start of Q2 2023 to lowest since 1H 2022..· Europe’s Group III price premium to regional Group II prices falls to narrowest level in almost a year.· Europe’s Group III prices flip to increasingly steep discount to US Group III prices since early Sep 2023.· Europe’s total Group III base oils supply rises slightly in first eight months of 2023, stays in narrow range vs 2021 and 2022.· Trend suggests Europe Group III prices face more pressure from shrinking demand for Group III base oils than from any significant rise in supply..· Composition of Europe’s Group III supply changes – supplies rise by 7pc in 2023 from Mideast Gulf and by 11pc from Asia-Pacific.· Cumulative additional volume from the two regions amounts to more than 55,000t in first eight months of 2023.· Europe’s rising supply from Mideast Gulf and Asia contrasts with fall in China’s Group III base oil imports from those two regions.· China’s imports from Mideast Gulf and southeast Asia fall by more than 20,000t, or 9pc, in first eight months of 2023..· China’s premium-grade imports from South Korea, which include Group III base oils, fall by 29,000t in first eight months of 2023..· China’s total base oils exports to Europe come to less than 7,000t in first eight months of 2023.· Trend suggests some Group III supplies from Asia and Mideast Gulf that previously moved to China are moving to Europe instead.· Trend suggests Europe’s Group III market faces more pressure from China’s shrinking demand for Group III base oils than from any rise in the country’s base oils exports..Global base oils - week of Oct 23: Price outlook - margins
· Europe’s Group III base oils prices stay unusually weak versus gasoil and VGO, versus Group II base oils, and versus US Group III prices, ICIS data shows.· Trend points to falling demand and plentiful Group III base oils supply in Europe.· Weak Chinese Group III base oils consumption, rather than any rise in Chinese production and exports, is exacerbating Europe’s plentiful Group III base oils supply.· Europe’s Group III base oil price premium versus VGO slumps from start of Q2 2023 to lowest since 1H 2022..· Europe’s Group III price premium to regional Group II prices falls to narrowest level in almost a year.· Europe’s Group III prices flip to increasingly steep discount to US Group III prices since early Sep 2023.· Europe’s total Group III base oils supply rises slightly in first eight months of 2023, stays in narrow range vs 2021 and 2022.· Trend suggests Europe Group III prices face more pressure from shrinking demand for Group III base oils than from any significant rise in supply..· Composition of Europe’s Group III supply changes – supplies rise by 7pc in 2023 from Mideast Gulf and by 11pc from Asia-Pacific.· Cumulative additional volume from the two regions amounts to more than 55,000t in first eight months of 2023.· Europe’s rising supply from Mideast Gulf and Asia contrasts with fall in China’s Group III base oil imports from those two regions.· China’s imports from Mideast Gulf and southeast Asia fall by more than 20,000t, or 9pc, in first eight months of 2023..· China’s premium-grade imports from South Korea, which include Group III base oils, fall by 29,000t in first eight months of 2023..· China’s total base oils exports to Europe come to less than 7,000t in first eight months of 2023.· Trend suggests some Group III supplies from Asia and Mideast Gulf that previously moved to China are moving to Europe instead.· Trend suggests Europe’s Group III market faces more pressure from China’s shrinking demand for Group III base oils than from any rise in the country’s base oils exports..Global base oils - week of Oct 23: Price outlook - margins