· Asia’s base oils supply could take longer to see a rise in surplus volumes as plant maintenance in China and slowdown in flows from Mideast Gulf balance out signs of improving availability from other sources.· Arbitrage to more distant markets stays hard to work, raising prospect of faster pick-up in surplus supplies in the region when availability does improve.· India likely to see pick-up in arrival of arbitrage cargoes from US in April 2024.· Group III plant maintenance work in Asia could trigger change in trade flows to cover term commitments. .· China’s domestic supply, or output and net imports, rises more than 30% in first two months of 2024 vs year-earlier levels..· Weaker domestic Chinese prices in recent weeks suggest supply is sufficient to cover for seasonal pick-up in domestic demand and for round of plant maintenance work.· China’s steady base oils imports, even with rise in domestic output, suggest the country’s requirements for overseas supplies could be steadying.· Even so, the prospect of imports staying close to current levels boosts the incentive for regional refiners to maintain their focus on targeting other markets instead.· South Korea’s base oils exports to China show signs of rising in March 2024 vs Jan 2024 and Feb 2024.· Rise in South Korea’s shipments to China typically trigger smaller share of supplies for other markets.· Taiwan’s base oils exports rise strongly in H2 March 2024, rebounding from lower-than-usual volumes in H1 March 2024, with most of the supplies heading towards southeast Asia.· Singapore’s base oils exports rise strongly during last two weeks, after signs of lower-than-usual volumes in Feb 2024..· South Korea’s February base oils exports to UAE rise to highest in more than a decade..· Surge in supplies helps to cover for slowdown in shipments from markets like Europe and Saudi Arabia to UAE.· Rise in supplies provides counterbalance to muted Chinese demand.· Rise in supplies coincides with slowdown in South Korea’s February base oil exports to India, which is likely to absorb swathe of arbitrage shipments from US in coming weeks..· South Korea’s February base oils exports include surge in shipments to Latin America to eighteen-month high..· Rise in shipments, mostly to Colombia, suggest some arbitrage shipments continue to move to Latin America even with US export prices at unusually competitive levels versus FOB Asia Group II prices.· Shipments help to maintain more balanced supplies in Asia market. .· Singapore takes delivery in H2 March 2024 of Group I base oils cargo from Italy.· Cargo is first from Italy to reach Singapore this year..· Cargo took close to two months to reach Singapore after setting off from Italy in mid-Jan 2024.· Limited exports from Europe and extended voyage times compound tight Group I availability in Asia market so far in 2024..· Slowdown in shipments from Saudi Arabia extends through March 2024, raising prospect of cutting India’s imports from the country.· Slowdown forces India’s buyers to carry on lining up alternative supplies from other sources..· India’s Group III 4cSt base oils imports fall to six-month low in Feb 2024..· Imports fall mostly because of dip in shipments from Mideast Gulf markets like Qatar.· Fall in imports from Qatar follow signs of dip in global base oils imports from Qatar in Jan 2024.· India’s base oils imports in H1 March 2024 include more Group I and Group III supplies from Russia, slowdown in supplies from Saudi Arabia..Asia base oils demand outlook: Week of March 25.Global base oils margins outlook: Week of March 25.Global base oils arb outlook: Week of March 25.Global base oils cargo flows: Week of March 25
· Asia’s base oils supply could take longer to see a rise in surplus volumes as plant maintenance in China and slowdown in flows from Mideast Gulf balance out signs of improving availability from other sources.· Arbitrage to more distant markets stays hard to work, raising prospect of faster pick-up in surplus supplies in the region when availability does improve.· India likely to see pick-up in arrival of arbitrage cargoes from US in April 2024.· Group III plant maintenance work in Asia could trigger change in trade flows to cover term commitments. .· China’s domestic supply, or output and net imports, rises more than 30% in first two months of 2024 vs year-earlier levels..· Weaker domestic Chinese prices in recent weeks suggest supply is sufficient to cover for seasonal pick-up in domestic demand and for round of plant maintenance work.· China’s steady base oils imports, even with rise in domestic output, suggest the country’s requirements for overseas supplies could be steadying.· Even so, the prospect of imports staying close to current levels boosts the incentive for regional refiners to maintain their focus on targeting other markets instead.· South Korea’s base oils exports to China show signs of rising in March 2024 vs Jan 2024 and Feb 2024.· Rise in South Korea’s shipments to China typically trigger smaller share of supplies for other markets.· Taiwan’s base oils exports rise strongly in H2 March 2024, rebounding from lower-than-usual volumes in H1 March 2024, with most of the supplies heading towards southeast Asia.· Singapore’s base oils exports rise strongly during last two weeks, after signs of lower-than-usual volumes in Feb 2024..· South Korea’s February base oils exports to UAE rise to highest in more than a decade..· Surge in supplies helps to cover for slowdown in shipments from markets like Europe and Saudi Arabia to UAE.· Rise in supplies provides counterbalance to muted Chinese demand.· Rise in supplies coincides with slowdown in South Korea’s February base oil exports to India, which is likely to absorb swathe of arbitrage shipments from US in coming weeks..· South Korea’s February base oils exports include surge in shipments to Latin America to eighteen-month high..· Rise in shipments, mostly to Colombia, suggest some arbitrage shipments continue to move to Latin America even with US export prices at unusually competitive levels versus FOB Asia Group II prices.· Shipments help to maintain more balanced supplies in Asia market. .· Singapore takes delivery in H2 March 2024 of Group I base oils cargo from Italy.· Cargo is first from Italy to reach Singapore this year..· Cargo took close to two months to reach Singapore after setting off from Italy in mid-Jan 2024.· Limited exports from Europe and extended voyage times compound tight Group I availability in Asia market so far in 2024..· Slowdown in shipments from Saudi Arabia extends through March 2024, raising prospect of cutting India’s imports from the country.· Slowdown forces India’s buyers to carry on lining up alternative supplies from other sources..· India’s Group III 4cSt base oils imports fall to six-month low in Feb 2024..· Imports fall mostly because of dip in shipments from Mideast Gulf markets like Qatar.· Fall in imports from Qatar follow signs of dip in global base oils imports from Qatar in Jan 2024.· India’s base oils imports in H1 March 2024 include more Group I and Group III supplies from Russia, slowdown in supplies from Saudi Arabia..Asia base oils demand outlook: Week of March 25.Global base oils margins outlook: Week of March 25.Global base oils arb outlook: Week of March 25.Global base oils cargo flows: Week of March 25
