· Asia’s base oils prices rise strongly versus feedstock and competing fuel prices, more than reversing recent weakness in Jan 2025.· Rising base premiums coincide with/precede increasingly widespread round of plant maintenance throughout Asia over coming months.· Plant maintenance likely to limit availability of spot supplies, complicating options for buyers relying on spot volumes to boost inventories.· Plant maintenance could also squeeze sellers’ term volumes to lower end of agreed range..· Premium of CFR India Group II prices over US export prices stays narrower than in Feb 2024..· Narrower premium, and signs of sellers’ growing inflexibility over price levels, puts onus on buyers to adjust prices to make arbitrage more feasible.· Narrower premium raises prospect of continuing to curb volume of arbitrage shipments from US..· Taiwan’s Group II base oils export volumes stay high so far in Feb 2025, with signs of strong pick-up in shipment of heavy grades.· South Korea’s base oils output falls in Dec 2024 to second-lowest level in eight months..· Output likely stayed lower than usual in Jan 2024 because of lower run-rates.· Lower output at end-2024 and early this year could complicate moves to build stocks ahead of planned plant maintenance from end-Feb 2024.· Lower output cuts size of Asia’s supply surplus at end-2024 and early this year, at time of year when it typically rises.· Lower output limits option for overseas buyers to build stocks as buffer ahead of plant maintenance.· Lower stocks and smaller regional surplus could magnify impact of plant shutdowns during Q1-Q2 2025..· Thailand’s base oils output holds firm in Dec 2024, rises in Q4 2024 to highest since H1 2021..· Thailand’s firm output supports total supply at high level that outpaces demand, leaving large surplus at year-end.. · Asia’s firm Group I heavy-grade base oils prices point to ongoing supply tightness, suggesting that rise in Thailand’s supply is insufficient to plug shortfall.· Dynamic leaves Asia increasingly reliant on sources outside the region to cover its Group I base oils requirements.· Dynamic curbs Asia’s ability to supply other markets like India and Middle East with additional Group I supplies..· Asia’s base oils supply, less regional demand and China’s base oils imports, barely maintains surplus in Dec 2024..· Drop in surplus mirrors similar trend in Dec 2023, contrasts with large surplus in Dec 2022.· Lower surplus cuts pressure on refiners to line up arbitrage shipments.· Lower surplus increases pressure on refiners and blenders to replenish stocks ahead of plant maintenance..· Combined Group I base oils exports from Thailand, Japan, Indonesia fall to ten-month low in Dec 2024..· Lower supply likely further tightens availability of Group I brightstock at start of 2025.· Lower supply sustains demand for supplies from other regions..· China’s paraffinic base oils output holds steady in Jan 2025 even with lunar new year holidays falling in month of January this year..· China’s base oils output fell in Feb 2024 from Jan 2024, coinciding with lunar new year holidays falling in month of February last year.· Trend raises to prospect of rise in demand in Feb 2025, subsequent rise in supply to meet demand, and rise in domestic output to boost supply.· Dynamic would cut China’s requirements for supplies from overseas markets..· Singapore’s base oils exports rebound in past week but stay lower than usual in four weeks to early-Feb 2025..· Singapore takes delivery of another cargo from Netherlands, boosting imports from Europe in last four weeks to highest in almost two years..· Sustained flow of shipments from Europe helps to boost regional supply ahead of seasonal pick-up in demand and plant maintenance work..· Asia’s base oils imports from Qatar fall to twenty-two-month low in Dec 2024..· Unusually-large dip in imports points to change in trade flows or to production issues in Q4 2024..Asia base oils demand outlook: Week of 10 Feb.China’s Jan base oils output holds firm.Asia’s December lube demand rises .S Korea’s Dec base oils output falls.Thailand Dec base oils supply holds firm
