· Asia’s base oils supply likely to be mixed, with Group I availability staying tight, Group III surplus moving to more distant markets, and pressure on Group II margins.· Asia’s Group I base oils supply likely to stay tight amid plant maintenance work in southeast Asia.· Asia’s Group III base oils supply could start to tighten following surge of arbitrage shipments in Dec 2023.· Round of regional Group III plant maintenance in Q1 2024 then starts in January.· Asia’s Group II base oils supply gets boost from signs of strong pick-up in flows from Taiwan.· Most of Taiwan’s January shipments move to China, curbing more regionwide impact of pick-up in its supply..· Asia’s surplus of base oils supply over demand rises to three-month high in Nov 2023..· Rise in supply surplus in Dec 2023 could be smaller than year-earlier levels amid gradual restart of Taiwan’s Group II unit and firm demand in India.· Surplus supply could rise more sharply in Jan 2024 - demand typically falls sharply in January from the previous month, while regional base oils production shows signs of reverting closer to normal.· Rising surplus supply increases prospect of pick-up in exports or cut in production to limit supply-build.· Any rise in surplus supply likely to consist more of Group II and Group III base oils rather than Group I base oils..· Asia’s November base oils exports fall to four-month low on dip in supplies from northeast Asia..· Drop in exports reflects signs of tighter supplies of Group I and Group II base oils, build-up of Group III supplies.· Lower exports coincides with signs of more muted regional demand that boosts blenders’ preference to maintain lower stocks. · Lower November exports partially counters impact of more muted regional demand but leave refiners with larger volumes to clear over following weeks, especially of Group III base oils.· Market sees signs of pick-up in exports of Group III shipments to more distant markets in Dec 2023, muted rise in shipments from Taiwan and slowdown in flows from Singapore at end-2023.· Trend could curb size of regional supply-build at end-2023 in face of seasonal slowdown in demand. .· Indonesia’s November Group III base oils exports fall to four-month low, stay unusually low..· Any extension of low exports into 2024 could have larger market impact amid heavier round of Group III plant maintenance this year.· Demand could also get a boost from more competitive global Group III prices compared with last year.· Indonesia exports no Group III shipments to China in Nov 2023 for fifth month, pointing to change in strategy.· Sustained pause in exports to China coincides with rise in China’s domestic Group III production – although these supplies lack global OEM approvals..· Singapore’s base oils exports to India slump over last four weeks combined to five-month low.· Slowdown coincides with tighter Group I availability in southeast Asia and seasonal rise in demand in China..· India could see slowdown in very-light grade supplies from Spain, with January shipment from Spain smaller than usual and set to take longer than usual to reach India.· India’s sliding very-light grade base oil premium to regional gasoil prices could cut attraction for other overseas refiners to move more supplies to India.· India’s December base oils imports include unusual shipment of naphthenic base oils from Brazil..Asia base oils - week of Jan 15: Demand outlook.Global base oils - week of Jan 15: Price outlook - margins.Global base oils - week of Jan 15: Price outlook - arbitrage
· Asia’s base oils supply likely to be mixed, with Group I availability staying tight, Group III surplus moving to more distant markets, and pressure on Group II margins.· Asia’s Group I base oils supply likely to stay tight amid plant maintenance work in southeast Asia.· Asia’s Group III base oils supply could start to tighten following surge of arbitrage shipments in Dec 2023.· Round of regional Group III plant maintenance in Q1 2024 then starts in January.· Asia’s Group II base oils supply gets boost from signs of strong pick-up in flows from Taiwan.· Most of Taiwan’s January shipments move to China, curbing more regionwide impact of pick-up in its supply..· Asia’s surplus of base oils supply over demand rises to three-month high in Nov 2023..· Rise in supply surplus in Dec 2023 could be smaller than year-earlier levels amid gradual restart of Taiwan’s Group II unit and firm demand in India.· Surplus supply could rise more sharply in Jan 2024 - demand typically falls sharply in January from the previous month, while regional base oils production shows signs of reverting closer to normal.· Rising surplus supply increases prospect of pick-up in exports or cut in production to limit supply-build.· Any rise in surplus supply likely to consist more of Group II and Group III base oils rather than Group I base oils..· Asia’s November base oils exports fall to four-month low on dip in supplies from northeast Asia..· Drop in exports reflects signs of tighter supplies of Group I and Group II base oils, build-up of Group III supplies.· Lower exports coincides with signs of more muted regional demand that boosts blenders’ preference to maintain lower stocks. · Lower November exports partially counters impact of more muted regional demand but leave refiners with larger volumes to clear over following weeks, especially of Group III base oils.· Market sees signs of pick-up in exports of Group III shipments to more distant markets in Dec 2023, muted rise in shipments from Taiwan and slowdown in flows from Singapore at end-2023.· Trend could curb size of regional supply-build at end-2023 in face of seasonal slowdown in demand. .· Indonesia’s November Group III base oils exports fall to four-month low, stay unusually low..· Any extension of low exports into 2024 could have larger market impact amid heavier round of Group III plant maintenance this year.· Demand could also get a boost from more competitive global Group III prices compared with last year.· Indonesia exports no Group III shipments to China in Nov 2023 for fifth month, pointing to change in strategy.· Sustained pause in exports to China coincides with rise in China’s domestic Group III production – although these supplies lack global OEM approvals..· Singapore’s base oils exports to India slump over last four weeks combined to five-month low.· Slowdown coincides with tighter Group I availability in southeast Asia and seasonal rise in demand in China..· India could see slowdown in very-light grade supplies from Spain, with January shipment from Spain smaller than usual and set to take longer than usual to reach India.· India’s sliding very-light grade base oil premium to regional gasoil prices could cut attraction for other overseas refiners to move more supplies to India.· India’s December base oils imports include unusual shipment of naphthenic base oils from Brazil..Asia base oils - week of Jan 15: Demand outlook.Global base oils - week of Jan 15: Price outlook - margins.Global base oils - week of Jan 15: Price outlook - arbitrage