· Asia base oils prices stay high vs feedstock/gasoil prices, especially for time of year.· Firm base oils margins point to tight supply-demand fundamentals.· Firm base oils margins could trigger larger supply-build if fundamentals are weaker than in Q3 2024..· Less feasible arbitrage to Americas and Europe keeps more supplies in Asia-Pacific region, boosts reliance on markets like India and Middle East to clear any surplus volumes.· US base oils discount to CFR India Group II prices holds steady for past month after widening sharply in Sept-Oct 2024..· Steady price discount could limit feasibility and volume of US shipments to markets like India..· Asia’s base oils surplus of supply over demand likely rises in Q4 2024 and into early 2025 amid higher supply and lower consumption.· Supply likely rises in Q4 2024 following completion of plant maintenance work in Oct 2024.· Demand likely falls in Q4 2024 amid seasonal slowdown.· Supply already outpaces demand in Oct 2024, even during peak period of plant maintenance work..· Dynamic suggests month of September was peak period of regional supply-tightness.· Prospect of rising surplus supply increases importance of arbitrage opportunities to remove surplus volumes from the region.· Prospect of rising surplus supply increases importance of limiting arbitrage flows from other markets to Asia-Pacific region..· Taiwan’s base oils exports stay relatively firm in H1 Dec 2024, after surge in shipments in Nov 2024 and already-firm volumes in Oct 2024..· Shipment of larger-than-usual volume of supplies to UAE in Nov 2024 suggests that Asia-Pacific region struggles to absorb the supplies..· Singapore’s base oils exports surge in past week, triggering rebound in shipments over last four weeks closer to more typical monthly levels..· Singapore takes delivery in past week of more supplies from Italy and Netherlands.· Shipments keep base oils imports from Europe at higher levels, especially compared with H1 2024..· Shipments from US likely to rise in coming weeks after staying unusually low over past two months..· Shipments likely to rise after US base oils exports to Singapore rebound in Oct 2024 following pause in flows in Q3 2024..· Rise in shipments follows unusual pick-up in flows in H1 2024, even with muted demand and pick-up in supply in southeast Asia market at year-end..· Asia’s Group I base oils exports from Japan, Thailand, and Indonesia combined rise in Oct 2024 to highest since mid-2023..· Rise in exports coincides with pick-up in flow of Group I shipments from Europe to southeast Asia in recent months.· Asia’s Group I base oils prices hold firm vs feedstock/competing fuel prices even with pick-up in supplies in Q4 2024.· Firm margins, even with rise in supply, could point to expectations of tighter supply in coming months because of factors like plant maintenance work..· Rise in arbitrage shipments from US to West Africa extend into Q4 2024.· Rise in exports to West Africa and surge in shipments to Latin America in Oct 2024 could curb volume of surplus US supplies available for other outlets like India.· Trend would extend lower-than-expected flow of arbitrage shipments from US to India during H2 2024.· Any signs of lower-than-expected flows from US to markets like India would curb size of any supply-build in Asia-Pacific market at year-end and early next year..Asia base oils demand outlook: Week of 16 Dec.Taiwan’s Nov base oils exports rise.Asia’s October lube demand rises
· Asia base oils prices stay high vs feedstock/gasoil prices, especially for time of year.· Firm base oils margins point to tight supply-demand fundamentals.· Firm base oils margins could trigger larger supply-build if fundamentals are weaker than in Q3 2024..· Less feasible arbitrage to Americas and Europe keeps more supplies in Asia-Pacific region, boosts reliance on markets like India and Middle East to clear any surplus volumes.· US base oils discount to CFR India Group II prices holds steady for past month after widening sharply in Sept-Oct 2024..· Steady price discount could limit feasibility and volume of US shipments to markets like India..· Asia’s base oils surplus of supply over demand likely rises in Q4 2024 and into early 2025 amid higher supply and lower consumption.· Supply likely rises in Q4 2024 following completion of plant maintenance work in Oct 2024.· Demand likely falls in Q4 2024 amid seasonal slowdown.· Supply already outpaces demand in Oct 2024, even during peak period of plant maintenance work..· Dynamic suggests month of September was peak period of regional supply-tightness.· Prospect of rising surplus supply increases importance of arbitrage opportunities to remove surplus volumes from the region.· Prospect of rising surplus supply increases importance of limiting arbitrage flows from other markets to Asia-Pacific region..· Taiwan’s base oils exports stay relatively firm in H1 Dec 2024, after surge in shipments in Nov 2024 and already-firm volumes in Oct 2024..· Shipment of larger-than-usual volume of supplies to UAE in Nov 2024 suggests that Asia-Pacific region struggles to absorb the supplies..· Singapore’s base oils exports surge in past week, triggering rebound in shipments over last four weeks closer to more typical monthly levels..· Singapore takes delivery in past week of more supplies from Italy and Netherlands.· Shipments keep base oils imports from Europe at higher levels, especially compared with H1 2024..· Shipments from US likely to rise in coming weeks after staying unusually low over past two months..· Shipments likely to rise after US base oils exports to Singapore rebound in Oct 2024 following pause in flows in Q3 2024..· Rise in shipments follows unusual pick-up in flows in H1 2024, even with muted demand and pick-up in supply in southeast Asia market at year-end..· Asia’s Group I base oils exports from Japan, Thailand, and Indonesia combined rise in Oct 2024 to highest since mid-2023..· Rise in exports coincides with pick-up in flow of Group I shipments from Europe to southeast Asia in recent months.· Asia’s Group I base oils prices hold firm vs feedstock/competing fuel prices even with pick-up in supplies in Q4 2024.· Firm margins, even with rise in supply, could point to expectations of tighter supply in coming months because of factors like plant maintenance work..· Rise in arbitrage shipments from US to West Africa extend into Q4 2024.· Rise in exports to West Africa and surge in shipments to Latin America in Oct 2024 could curb volume of surplus US supplies available for other outlets like India.· Trend would extend lower-than-expected flow of arbitrage shipments from US to India during H2 2024.· Any signs of lower-than-expected flows from US to markets like India would curb size of any supply-build in Asia-Pacific market at year-end and early next year..Asia base oils demand outlook: Week of 16 Dec.Taiwan’s Nov base oils exports rise.Asia’s October lube demand rises
