· Asia and domestic China base oils premium to feedstock/diesel prices rises strongly.· High base oils premium incentivizes refiners to raise output at a time when buying interest is already more muted.· Any further slowdown in demand could trigger a faster build-up of surplus supplies.· Lower output and/or lower prices would boost likelihood of more balanced supplies.· FOB NE Asia Group II light-grade price discount to India and China prices continues to narrow.· Less feasible arbitrage to Asia’s two largest markets boosts need for refiners to trim output or to move more supplies to other markets.· Arbitrage to move surplus supplies to outlets like Europe and Americas stays hard to work..· South Korea’s base oils exports could rise in May 2024 following signs of slowdown in shipments in April 2024.· Exports show signs of slowing in April 2024 after South Korea’s March base oils output falls to eight-month low..· Output in April 2024 likely stayed lower than usual because of plant maintenance work.· Output likely to recover to more typical levels in May 2024 following completion of plant maintenance work..· Singapore’s base oils exports show signs of staying lower than usual in April for a third month amid slowdown in flows during last two weeks of the month and dip in shipments to southeast Asia..· Singapore’s base oils exports to India in four weeks to 1 May extend rise to unusually high levels above 40,000 tonnes.· Volume rises from average exports of around 26,000 tonnes/month to India in year to March 2024.· Singapore’s imports show signs of falling in April 2024 from previous month on slowdown in shipments from Qatar, Hong Kong, South Korea, China and US..· China’s base oils supply shows signs of falling in April 2024 amid plant maintenance work, cautious demand..· Japan’s March base oils output falls for twelfth month from year-earlier levels..· Sustained fall in Japan’s supply is key factor underlying Asia’s increasingly tight availability of Group I base oils.· Japan’s March base oils output rises from February to three-month high.· Higher month-on-month output could reflect response to tight supply and increasingly firm Group I base oils prices in Asia.· Japan’s March base oils output as share of country’s total refined products output rises to 1.45% from 1.38% in February..· Output share remains low compared with typical levels even with no scheduled plant maintenance work.· Lower share of output reflects Japan refiners’ lower base oils production capacity and more limited room to raise production in response to firm prices or tight supply fundamentals. .· Thailand’s March base oils exports fall to seven-year low, customs data shows..· Exports fall even after completion of domestic plant maintenance work in Feb 2024.· Lower shipments compound tight supply of Group I base oils in Asia, extend tightness into Q2 2024..Asia base oils demand outlook: Week of 6 May
· Asia and domestic China base oils premium to feedstock/diesel prices rises strongly.· High base oils premium incentivizes refiners to raise output at a time when buying interest is already more muted.· Any further slowdown in demand could trigger a faster build-up of surplus supplies.· Lower output and/or lower prices would boost likelihood of more balanced supplies.· FOB NE Asia Group II light-grade price discount to India and China prices continues to narrow.· Less feasible arbitrage to Asia’s two largest markets boosts need for refiners to trim output or to move more supplies to other markets.· Arbitrage to move surplus supplies to outlets like Europe and Americas stays hard to work..· South Korea’s base oils exports could rise in May 2024 following signs of slowdown in shipments in April 2024.· Exports show signs of slowing in April 2024 after South Korea’s March base oils output falls to eight-month low..· Output in April 2024 likely stayed lower than usual because of plant maintenance work.· Output likely to recover to more typical levels in May 2024 following completion of plant maintenance work..· Singapore’s base oils exports show signs of staying lower than usual in April for a third month amid slowdown in flows during last two weeks of the month and dip in shipments to southeast Asia..· Singapore’s base oils exports to India in four weeks to 1 May extend rise to unusually high levels above 40,000 tonnes.· Volume rises from average exports of around 26,000 tonnes/month to India in year to March 2024.· Singapore’s imports show signs of falling in April 2024 from previous month on slowdown in shipments from Qatar, Hong Kong, South Korea, China and US..· China’s base oils supply shows signs of falling in April 2024 amid plant maintenance work, cautious demand..· Japan’s March base oils output falls for twelfth month from year-earlier levels..· Sustained fall in Japan’s supply is key factor underlying Asia’s increasingly tight availability of Group I base oils.· Japan’s March base oils output rises from February to three-month high.· Higher month-on-month output could reflect response to tight supply and increasingly firm Group I base oils prices in Asia.· Japan’s March base oils output as share of country’s total refined products output rises to 1.45% from 1.38% in February..· Output share remains low compared with typical levels even with no scheduled plant maintenance work.· Lower share of output reflects Japan refiners’ lower base oils production capacity and more limited room to raise production in response to firm prices or tight supply fundamentals. .· Thailand’s March base oils exports fall to seven-year low, customs data shows..· Exports fall even after completion of domestic plant maintenance work in Feb 2024.· Lower shipments compound tight supply of Group I base oils in Asia, extend tightness into Q2 2024..Asia base oils demand outlook: Week of 6 May
