· Asia’s Group II base oils price-premium to Singapore gasoil holds in narrow range.· Firm gasoil premium to crude oil puts more pressure on refiners to trim light-grade supply rather than heavy grades, despite persistent surplus availability of heavy grades..· Asia’s base oils supply-surplus could face more upward pressure over coming months, even with firmer gasoil premium to crude, amid lighter round of plant-maintenance and start-up of new base oils units.· Asia’s base oils supply already rises to thirteen-month high in Aug 2025 following completion of most plant-maintenance work.· Supply rises in Aug 2025 from year-earlier levels for first time in four months and just second time this year..· Persistent fall in supply earlier this year curbs build-up of surplus volumes.· Supply could now extend rise in coming months.· Rise in supply in Aug 2025 lifts Asia’s surplus of supply over demand to one-year high..· Any extension of pick-up in surplus supply over coming months could prompt adjustment in global trade flows seen so far this year to accommodate the additional volumes..· Taiwan’s base oils exports show signs of slowing so far in H1 Oct 2025 vs same period a month earlier.· Any more extended slowdown through rest of Oct 2025 would be unusual, after monthly exports consistently stay high so far this year.· Singapore’s base oils exports surge over past week to highest weekly volume since Feb 2025.· Rise in shipments lifts total exports from domestic sources over last four weeks to highest level since March 2025..· Share of exports originating from other sources extends fall to lowest since end-Q1 2025..· Any extension of that trend could trigger slowdown in shipments from US and Europe to Singapore..· China’s paraffinic base oils output stays higher than usual in Sept 2025 for second month..· High output and firm domestic prices to mid-Sept 2025 suggest demand was sufficiently strong to absorb the supplies.· Dynamic would curb volume of surplus supplies carried into Q4 2025.· Even so, any extension of output at elevated levels in Q4 2025, combined with seasonal slowdown in demand, could trigger rapid rise in inventories.· Slowdown in requirements for overseas supplies would help to cushion against such a scenario.· Any such slowdown would require weaker domestic base oils prices relative to overseas prices to make the arbitrage less attractive.· Any such price-weakness could also make domestic output less attractive.· Such a scenario could keep fundamentals more balanced but also sustain China’s requirements for supplies from overseas markets.· China’s Group III base oils output rises for second month in Sept 2025 to six-month high..· Group III base oils output rises even with domestic Group III prices staying unusually weak relative to Group II prices..· Narrow Group III price-premium to Group II base oils incentivizes refiners to produce more Group II base oils instead.· Rise in Group III base oils output in Aug-Sept 2025 follows drop in China’s Group III base oils supply from year-earlier levels for three straight months to Aug 2025..· Supply slips as fall in imports compounds impact of lower domestic output.· Rise in Group III base oils output could point to insufficient domestic availability of supply to meet demand.· Any such tightening of supply-demand fundamentals would typically trigger price-reaction..· Thailand’s surplus of base oils supply over demand rises to three-year high in Aug 2025..· Surplus surges after sharp rebound in Thailand’s base oils output in Aug 2025 following plant-maintenance work.· Rise in output triggers rebound in Thailand’s surplus Group I base oils supply to three-year high in Aug 2025..· Rise in Singapore’s Group I base oils imports in Sept 2025 adds to surge in Thailand’s surplus Group I supply.· Pick-up in Group I supply exceeds Asia’s demand requirements, boosting need to clear surplus volumes from the region.· Ex-tank Sharjah Group I SN 500 price-premium to FOB Asia cargo price rises in H1 Oct 2025 to highest level in more two years, facilitating such a scenario..· Widening price-premium boosts feasibility of lining up arbitrage shipments to move to Middle East.· FOB Asia Group I cargo price-premium to Singapore gasoil holds at level that sustains incentive for refiners to maintain steady output despite recent rise in surplus supply..· Margins stay firm even with open arbitrage to Middle East.· Dynamic sustains incentive for refiners to maintain steady-to-firm output so long as demand in Middle East supports prices at higher levels. .China’s Sept base oils output stays high.Thailand's August base oils output rises.Asia base oils demand outlook: Week of 13 October.Base Oil News stories and analysis also available on ICIS platform
