· Asia’s base oils prices extend rise vs feedstock/gasoil prices.· Rising margins point to increasingly tight supply-demand fundamentals, incentivizing refiners to maximise output.· Incentive to maximise output coincides with closed arbitrage from Asia to other markets, and signs of steady flows from other regions to Asia.· Dynamic raises prospect of pick-up in surplus supply if demand were to ebb.· Stock-building ahead of scheduled plant maintenance and seasonal pick-up in demand likely magnified supply tightness in recent weeks.· Unexpected plant maintenance work in March 2025 could leave supply tighter for longer.· Taiwan’s base oils exports show signs of slowing in early-March 2025 compared with same period in Feb 2025.· Even so, with refiners’ and buyers’ stocks replenished, supply-tightness could start to ease following start of scheduled plant maintenance work.· Typical seasonal slowdown in consumption in month of April also curbs urgency for buyers to add to stocks. .· Singapore’s base oils exports rise sharply over past week, lifting shipments over past four weeks to highest since Q3 2023..· Sustained rise in exports since early-Feb 2025 adds to similar pick-up in shipments from Taiwan since then.· Singapore takes delivery in past week of largest weekly volume of shipments of European origin in more than three years.· Shipments sustain imports from Europe over past four weeks at unusually firm levels, extending trend since end-Q3 2024..· Sustained pick-up in shipments from Europe adds to supply in Asia-Pacific market..· China’s base oils output, based on production per day, rises in Feb 2025 to four-month high as higher premium-grade production counters slump in Group I output..· Scant signs of sharp pick-up in demand for overseas supplies early this year suggests that domestic supply is increasingly sufficient to cover requirements.· China’s Group I base oils accounts for less than 13% share of country’s output in Feb 2025, down from 17% share in 2024 and 22% in 2023..· Falling share highlights China’s growing output of premium grades, and falling output and demand for Group I base oils..· Japan’s base oils surplus edges lower in Jan 2025 after surging in Q4 2024 despite falling domestic output..· Rising surplus reflects surge in imports of premium-grade base oils and fall in exports of Group I base oils.· Surplus rises despite plant maintenance work during H2 2024.· Trend suggests Japan could face persistent surplus even with plant maintenance work in 2025.· Trend could prompt pick-up in exports from unusually low levels in H2 2024, extending such a move in Jan 2025..· Volume of any such extended pick-up in exports would likely be small.· A lack of extra Group I brightstock supplies in any additional exports would curb benefit of such a rise in supplies.· By contrast, any such additional supplies would be welcome in a region facing persistently tight availability of Group I brightstock..· Thailand’s Group I base oils output falls to eleven-month low in Jan 2025..· Lower output follows rise in Thailand’s surplus supply in Q4 2024 to multi-year high..· Lower output speeds up removal of supply-surplus.· Lower output precedes seasonal rise in demand in Asia later in Q1 2025.· Lower output and signs of rebalancing of supplies highlight lack of hedging tools that could help manage risk of building stocks ahead of seasonal rise in demand.· Lower output and lower stocks instead raise prospect of magnifying impact of seasonal rise in demand..· Global base oils exports rise by 6% in Q4 2024 from year earlier to highest since early 2020..· Exports rise in Q4 2024 even as shipments fall to three-month low in Dec 2024 amid dip in shipments from Asia especially, as well as Europe and US..· Exports rise in Q4 2024 because of surge in shipments in Oct-Nov 2024, especially to markets like Mexico and Africa.· Slowdown in exports in Dec 2024 points to more muted pressure to clear surplus volumes at end-2024 and early this year.· Dynamic highlights importance of outlets like Mexico and Africa to clear surplus volumes.· Importance of those kinds of outlets set to grow as new base oils production capacity adds to global supply over coming year..Thailand’s January base oils supply falls.China’s February base oils output mixed.Asia base oils demand outlook: Week of 10 March
