· Asia’s base oils supply likely to stay more readily available as margins stay high, incentivizing refiners to maximise output.· South Korea’s base oils exports likely revived in May 2024 from April 2024, with signs of strong pick-up in shipments to US.· CFR India N70 premium to Singapore gasoil prices holds close to highest since Nov 2023..· Firm premium incentivizes Asia’s refiners to maximise production of light-grade base oils rather than diesel.· Taiwan’s base oils exports revive in early June 2024, with pick-up in shipments of heavy grades especially..· Singapore’s re-exports of base oils originating from other regions rise over last four weeks to highest four-week volume since July 2023..· Any sustained rise in re-exports of shipments that originated from other regions would add to Singapore and Asia’s base oils supply.· Any sustained rise in re-exports over coming months would coincide with a time of year when demand in Asia typically faces a seasonal slowdown..· China’s May paraffinic base oils output holds in narrow range even as closed arbitrage boosts domestic buyers’ reliance on supplies from local refiners..· Steady output, closed arbitrage and lower Group II base oils premium to Shandong diesel prices point to weak demand.· Planned shutdown of several domestic Group II units in China over coming weeks would coincide with typical seasonal slowdown in demand during summer months.· Lower output and lower demand likely to curb China’s requirements for additional supplies from overseas refiners..· Thailand’s April Group I base oils output falls, keeping the country’s production levels unusually low so far this year..· Thailand’s lower base oils output and Japan’s sliding base oils exports more than outweigh seasonal slowdown in regional demand in April, keeping regional Group I supplies tighter than usual.· Tighter supply from two of Asia’s key Group I producers likely to curb the region’s ability to move arbitrage shipments to Europe to cover for that market's tighter supply, especially of brightstock.· Typical slowdown in China’s brightstock demand from end of second quarter of the year could ease supply tightness of the heavy-grade product.· Any surplus brightstock volumes could move to markets like India and UAE rather than to Europe..· India’s May base oils imports show signs of staying at least as high as import volumes in April 2024.· India’s May base oils imports get boost from signs of pick-up in shipments from Saudi Arabia compared with recent months.· Pick-up in flows from Saudi Arabia to India shows signs of extending into June 2024.· Several cargoes of Group III base oils reach India in early June 2024 from UAE and Bahrain.· Pick-up in shipments from those markets adds to India’s supply, points to more muted Group III demand in other markets..Asia base oils demand outlook: Week of 10 June
· Asia’s base oils supply likely to stay more readily available as margins stay high, incentivizing refiners to maximise output.· South Korea’s base oils exports likely revived in May 2024 from April 2024, with signs of strong pick-up in shipments to US.· CFR India N70 premium to Singapore gasoil prices holds close to highest since Nov 2023..· Firm premium incentivizes Asia’s refiners to maximise production of light-grade base oils rather than diesel.· Taiwan’s base oils exports revive in early June 2024, with pick-up in shipments of heavy grades especially..· Singapore’s re-exports of base oils originating from other regions rise over last four weeks to highest four-week volume since July 2023..· Any sustained rise in re-exports of shipments that originated from other regions would add to Singapore and Asia’s base oils supply.· Any sustained rise in re-exports over coming months would coincide with a time of year when demand in Asia typically faces a seasonal slowdown..· China’s May paraffinic base oils output holds in narrow range even as closed arbitrage boosts domestic buyers’ reliance on supplies from local refiners..· Steady output, closed arbitrage and lower Group II base oils premium to Shandong diesel prices point to weak demand.· Planned shutdown of several domestic Group II units in China over coming weeks would coincide with typical seasonal slowdown in demand during summer months.· Lower output and lower demand likely to curb China’s requirements for additional supplies from overseas refiners..· Thailand’s April Group I base oils output falls, keeping the country’s production levels unusually low so far this year..· Thailand’s lower base oils output and Japan’s sliding base oils exports more than outweigh seasonal slowdown in regional demand in April, keeping regional Group I supplies tighter than usual.· Tighter supply from two of Asia’s key Group I producers likely to curb the region’s ability to move arbitrage shipments to Europe to cover for that market's tighter supply, especially of brightstock.· Typical slowdown in China’s brightstock demand from end of second quarter of the year could ease supply tightness of the heavy-grade product.· Any surplus brightstock volumes could move to markets like India and UAE rather than to Europe..· India’s May base oils imports show signs of staying at least as high as import volumes in April 2024.· India’s May base oils imports get boost from signs of pick-up in shipments from Saudi Arabia compared with recent months.· Pick-up in flows from Saudi Arabia to India shows signs of extending into June 2024.· Several cargoes of Group III base oils reach India in early June 2024 from UAE and Bahrain.· Pick-up in shipments from those markets adds to India’s supply, points to more muted Group III demand in other markets..Asia base oils demand outlook: Week of 10 June
