· Asia’s base oils price premium to feedstock/diesel prices stays high, incentivizing refiners to maintain or raise output.· Arbitrage stays shut for shipments to Asia from other markets like US and Europe.· Arbitrage stays more feasible to move shipments from Asia to the Americas.· Any such shipments could help to cut volume of surplus light-grade supplies in Asia.· Signs of rebound in Asia’s base oils exports in July 2024 likely reduce size of any surplus carried into start of Q3 2024 from June 2024.· Firm base oils margins, even with rise in exports in July 2024, point to demand fundamentals that were firm enough to absorb the supplies..· Taiwan’s base oils exports stay high so far in Aug 2024 but slow down from unusually high levels in July 2024.· Taiwan’s exports in Aug 2024 show signs of pick-up in shipments to China.· South Korea’s base oils exports show signs of slowing so far in Aug 2024 vs same period in July 2024.· Singapore’s base oils imports from China rise in late-July 2024 and early-Aug 2024, following slowdown in shipments during the previous month.· Singapore’s base oils exports show signs of reverting to more typical levels in recent weeks, following higher-than-usual in shipments in July 2024..· Singapore likely to take delivery of more supplies from US in coming weeks as exports from that market to the island-state extend rise to multi-year high in June 2024..· Rise in shipments adds to already-well-supplied Asia-Pacific market..· China’s paraffinic base oils output falls to nine-month low in July 2024 amid dip in Group I, Group II production..· Lower production coincides with and likely supports relatively firm base oils values vs domestic diesel prices, and increasingly firm Group II heavy-grade values.· Lower output and a more feasible arbitrage to China coincide with rise in supplies from other major regional producers such as Singapore in July 2024.· China’s Group III base oils output rises to multi-year high in July 2024, contrasting with drop in Group I/II output.· Trend could reflect stabilisation of production and specifications following start-up of new Group III capacity in past year, raising prospect of further rise in Group III output.· Domestic China Group III price premium to Group II prices narrows throughout this year, but much less sharply than in US and Europe.· Still-wide gap between domestic Group III and Group II prices incentivizes domestic refiners to produce more Group III base oils.· Any extension of the trend could curb China’s requirements for overseas supplies of Group III base oils..· Thailand’s Group I base oils output edges down in June 2024 from month earlier, falls for seventh month from year-earlier levels..· Output falls even with firm regional Group I base oils margins and demand.· Lower output could reflect refiners responding more to domestic rather than regional demand.· Lower output contrasts with firm domestic demand and rising imports.· That dynamic suggests rising demand is boosting requirements for premium-grade base oils rather than Group I base oils.· Either way, lower output compounds impact of drop in Japan’s base oils output and exports so far this year, adding to Asia’s tighter Group I supply.· South Korea remains Thailand’s largest supplier of base oils imports in H1 2024, with Singapore the second largest..· Imminent rise in India’s base oils production capacity over the coming year makes even more important markets like Thailand for refiners in South Korea and Singapore..· India’s base oils imports show signs of staying lower in July 2024.· Lower imports would coincide with planned plant maintenance work in India in July 2024.· Lower imports and output raises prospect of India's base oils supply shortfall vs demand extending into July 2024..US’ June base oils/lube exports rise.Thailand’s June output falls, imports rise.China’s July base oils output falls
· Asia’s base oils price premium to feedstock/diesel prices stays high, incentivizing refiners to maintain or raise output.· Arbitrage stays shut for shipments to Asia from other markets like US and Europe.· Arbitrage stays more feasible to move shipments from Asia to the Americas.· Any such shipments could help to cut volume of surplus light-grade supplies in Asia.· Signs of rebound in Asia’s base oils exports in July 2024 likely reduce size of any surplus carried into start of Q3 2024 from June 2024.· Firm base oils margins, even with rise in exports in July 2024, point to demand fundamentals that were firm enough to absorb the supplies..· Taiwan’s base oils exports stay high so far in Aug 2024 but slow down from unusually high levels in July 2024.· Taiwan’s exports in Aug 2024 show signs of pick-up in shipments to China.· South Korea’s base oils exports show signs of slowing so far in Aug 2024 vs same period in July 2024.· Singapore’s base oils imports from China rise in late-July 2024 and early-Aug 2024, following slowdown in shipments during the previous month.· Singapore’s base oils exports show signs of reverting to more typical levels in recent weeks, following higher-than-usual in shipments in July 2024..· Singapore likely to take delivery of more supplies from US in coming weeks as exports from that market to the island-state extend rise to multi-year high in June 2024..· Rise in shipments adds to already-well-supplied Asia-Pacific market..· China’s paraffinic base oils output falls to nine-month low in July 2024 amid dip in Group I, Group II production..· Lower production coincides with and likely supports relatively firm base oils values vs domestic diesel prices, and increasingly firm Group II heavy-grade values.· Lower output and a more feasible arbitrage to China coincide with rise in supplies from other major regional producers such as Singapore in July 2024.· China’s Group III base oils output rises to multi-year high in July 2024, contrasting with drop in Group I/II output.· Trend could reflect stabilisation of production and specifications following start-up of new Group III capacity in past year, raising prospect of further rise in Group III output.· Domestic China Group III price premium to Group II prices narrows throughout this year, but much less sharply than in US and Europe.· Still-wide gap between domestic Group III and Group II prices incentivizes domestic refiners to produce more Group III base oils.· Any extension of the trend could curb China’s requirements for overseas supplies of Group III base oils..· Thailand’s Group I base oils output edges down in June 2024 from month earlier, falls for seventh month from year-earlier levels..· Output falls even with firm regional Group I base oils margins and demand.· Lower output could reflect refiners responding more to domestic rather than regional demand.· Lower output contrasts with firm domestic demand and rising imports.· That dynamic suggests rising demand is boosting requirements for premium-grade base oils rather than Group I base oils.· Either way, lower output compounds impact of drop in Japan’s base oils output and exports so far this year, adding to Asia’s tighter Group I supply.· South Korea remains Thailand’s largest supplier of base oils imports in H1 2024, with Singapore the second largest..· Imminent rise in India’s base oils production capacity over the coming year makes even more important markets like Thailand for refiners in South Korea and Singapore..· India’s base oils imports show signs of staying lower in July 2024.· Lower imports would coincide with planned plant maintenance work in India in July 2024.· Lower imports and output raises prospect of India's base oils supply shortfall vs demand extending into July 2024..US’ June base oils/lube exports rise.Thailand’s June output falls, imports rise.China’s July base oils output falls
