· Asia’s heavy-grade base oils price-premium to Singapore gasoil holds firm, especially for Group I base oils.· Group II heavy-grade margins stay high despite lower outright prices.· High margins point to supply-demand fundamentals that are sufficiently strong to incentivize refiners to maintain high output.· High margins coincide with still-feasible arbitrage to move shipments to India.· High Group II margins coincide with increasingly competitive CFR UAE Group II heavy-grade prices relative ex-tank Sharjah Group I prices..· Feasible arbitrage and competitive prices point to sufficient demand to absorb the supplies.· Asia’s light-grade price-premium to Singapore gasoil extends strong rebound.· Higher margins incentivize refiners to reverse any moves to produce more diesel instead of base oils.· Rising margins coincide with firmer Group II light-grade prices in markets like India relative to source-markets like Asia and US..· Firm margins and feasible arbitrage opportunities point to sufficient demand to absorb higher supplies..· Asia base oils margins hold firm or trend higher even after completion of most plant-maintenance work in the region.· Sustained strength of base oils margins suggests any subsequent pick-up in supply remains at manageable levels.· Persistently closed arbitrage to Americas adds to signs of supply at manageable levels.· Dynamic suggests buying interest in Asia and Middle East remains sufficiently strong to absorb most of the region’s supplies.· Any slowdown in that demand, combined with firm margins and closed arbitrage to other markets, could trigger rapid rise in surplus supplies..· South Korea’s base oils exports stay relatively low in July 2025, especially with plant-maintenance work completed..· Lower exports, despite completion of maintenance work, could reflect refiners’ comfort with stock levels and lack of urgency to boost shipments.· South Korea’s lower exports back up signs of Asia’s relatively balanced supply fundamentals so far in Q3 2025..· Singapore’s base oils exports over past four weeks extend recovery closer to more typical levels..· Most of recent rise in Singapore’s exports reflects surge in shipments to China.· Shipments to India and southeast Asia stay lower..· Dynamic cushions impact of rise in base oils exports from South Korea to southeast Asia in July 2025..· Pace of Taiwan’s base oils exports slows sharply in past two weeks after surge in shipments in early-Aug 2025.· Any extension of slowdown would follow sustained surge in Taiwan’s base oils exports in Jan-July 2025 from year-earlier levels to highest levels since 2019..· Rise in exports taps Asia’s firm Group II base oils margins so far in 2025 amid tighter supply from other key regional sources.· Larger share of heavy-grade shipments than light grades in Jan-July 2025 magnifies benefit of higher margins..· Supplies from other key sources will need to rise in coming months to cushion impact of likely drop in Taiwan’s base oils exports in Q4 2025 because of plant-maintenance work.· Taiwan’s plant-maintenance work could cushion impact of any rise in supplies from several new units that are expected to start up in the region in the coming months.· Taiwan’s diversification of exports to growing number of outlets could then cushion impact of expected rise in regional supplies.· Shipments to Middle East, Pakistan and Bangladesh account for 14% of Taiwan’s base oils exports in Jan-July 2025..· Share rises from 10% in 2024 and from 3% in 2023.· Pick-up in exports to those markets follows rise in flows to southeast Asia and India in recent years and drop in shipments to China.· Dynamic leaves Taiwan with growing number of outlets for its supplies..· India’s imports rise to fourteen-month high in July 2025..· Rise in shipments to India helps to absorb large portion of any pick-up in surplus supplies in Asia.· Rise in shipments to India and more manageable supplies in Asia curb need to target more distant markets with surplus supplies.· Open arbitrage from Asia to India, and closed arbitrage from Asia to Americas, reflects that dynamic..· India’s imports in July 2025 include unusually large volume of Group I brightstock from US.· Rise in shipments follows steady weakening of US brightstock export price vs CFR India price to widest discount in more than five years..· US brightstock price-discount widens further so far in Q3 2025, facilitating additional arbitrage shipments to India.· Arbitrage flows from US help to cushion impact of pause in brightstock shipments from Thailand to India in recent months.· Brightstock supply from Thailand set to improve in coming weeks following restart of Group I unit after plant-maintenance work.· Any rise in supply, and pick-up in flows to India, could curb attraction of lining up more brightstock shipments from US to India..· Any rise in Group I shipments from Thailand would add to signs of more plentiful supply in Singapore in recent weeks.· Singapore’s Group I base oils imports already rise over last four weeks to highest level in more than four months..Taiwan’s July base oils exports rise.India’s July base oils imports rise.S Korea’s July base oils exports stay low.Asia base oils demand outlook: Week of 18 August
