· Asia’s base oils supply likely to stay mixed, depending on the grade.· Less feasible arbitrage to outlets like China and more distant markets like Americas point to still-limited surplus supply for now.· Less feasible arbitrage to outlets outside the region suggest surplus volumes could build up fast if regional supply improves and demand slows.· Taiwan’s base oils exports show signs of revival in recent days after staying lower than usual in H1 March 2024.· South Korea’s Group II supply expected to rise in March 2024 after slowdown in shipments in Feb 2024.· South Korea’s Group III supply set to fall because of scheduled plant maintenance work.· Recent shipments from Mideast Gulf and Russia boost Group I supply in India..· Singapore’s base oils exports rebound last week, boosting volumes over last four weeks to more typical levels to markets like China and India..· Singapore so far avoids repeat of surge in exports to China that it saw in March 2023.· Steady exports to China in recent weeks raise prospect of avoiding major supply-build in that market..· Asia’s firm base oils prices relative to gasoil and relative to other markets suggest the region’s supply-demand fundamentals remain balanced to tight for now.· Fundamentals stay balanced even after Asia’s January base oils supply rises to five-month high..· Stronger demand matches rise in supply, leaving surplus supply lower than usual at start of 2024..· Asia’s base oils exports show signs of slipping in Feb 2024 after rising to a four-month high in Jan 2024..· Slowdown in Asia’s exports in Feb 2024 would extend firm supply-demand fundamentals through most of Q1 2024.· South Korea’s February base oils exports fall to three-month low, adding to signs of drop in regional exports..· Group I base oils exports from Japan, Thailand and Indonesia combined fall to multi-year low in Jan 2024..· Group I exports set to stay lower than usual over the coming months because of structural fall in supply in Japan.· Trend incentivizes blenders to switch as much as possible to using other base oils grades in place of Group I..· Asia’s share of US Group III base oils imports trends lower in Jan 2024 and over past year.· Trend increases importance of boosting demand in other markets instead of US.· Other markets include Europe, where demand is weak; China, which is increasingly self-sufficient; and India, which will be more self-sufficient over the coming year.· Trend leaves southeast Asia as key outlet for regional Group III supplies..· Singapore takes delivery of large volume of base oils in past week, including unusually large shipments from Hong Kong and US.· Singapore’s base oils imports from China also get a boost..· India’s February base oils imports extend fall to four-month low on dip in arbitrage shipments from US and lower premium-grade supplies from Mideast Gulf..· Drop in shipments follows rise in Indian buyers’ stocks, fall in domestic demand at end-2023 and early 2024.· Drop in imports coincides with prospect of dip in supplies from Saudi Arabia and signs of slowdown in shipments from Taiwan to India in coming weeks.· Prospect of slowdown in shipments from regular suppliers, as well as increasingly competitive US prices, boost attraction of securing more supplies from US.· India’s February imports of Group I base oils from Russia and Mideast Gulf stay higher than usual, more than covering for slowdown in shipments from Thailand..Asia base oils demand outlook: Week of March 18.Global base oils margins outlook: Week of March 18.Global base oils arb outlook: Week of March 18
· Asia’s base oils supply likely to stay mixed, depending on the grade.· Less feasible arbitrage to outlets like China and more distant markets like Americas point to still-limited surplus supply for now.· Less feasible arbitrage to outlets outside the region suggest surplus volumes could build up fast if regional supply improves and demand slows.· Taiwan’s base oils exports show signs of revival in recent days after staying lower than usual in H1 March 2024.· South Korea’s Group II supply expected to rise in March 2024 after slowdown in shipments in Feb 2024.· South Korea’s Group III supply set to fall because of scheduled plant maintenance work.· Recent shipments from Mideast Gulf and Russia boost Group I supply in India..· Singapore’s base oils exports rebound last week, boosting volumes over last four weeks to more typical levels to markets like China and India..· Singapore so far avoids repeat of surge in exports to China that it saw in March 2023.· Steady exports to China in recent weeks raise prospect of avoiding major supply-build in that market..· Asia’s firm base oils prices relative to gasoil and relative to other markets suggest the region’s supply-demand fundamentals remain balanced to tight for now.· Fundamentals stay balanced even after Asia’s January base oils supply rises to five-month high..· Stronger demand matches rise in supply, leaving surplus supply lower than usual at start of 2024..· Asia’s base oils exports show signs of slipping in Feb 2024 after rising to a four-month high in Jan 2024..· Slowdown in Asia’s exports in Feb 2024 would extend firm supply-demand fundamentals through most of Q1 2024.· South Korea’s February base oils exports fall to three-month low, adding to signs of drop in regional exports..· Group I base oils exports from Japan, Thailand and Indonesia combined fall to multi-year low in Jan 2024..· Group I exports set to stay lower than usual over the coming months because of structural fall in supply in Japan.· Trend incentivizes blenders to switch as much as possible to using other base oils grades in place of Group I..· Asia’s share of US Group III base oils imports trends lower in Jan 2024 and over past year.· Trend increases importance of boosting demand in other markets instead of US.· Other markets include Europe, where demand is weak; China, which is increasingly self-sufficient; and India, which will be more self-sufficient over the coming year.· Trend leaves southeast Asia as key outlet for regional Group III supplies..· Singapore takes delivery of large volume of base oils in past week, including unusually large shipments from Hong Kong and US.· Singapore’s base oils imports from China also get a boost..· India’s February base oils imports extend fall to four-month low on dip in arbitrage shipments from US and lower premium-grade supplies from Mideast Gulf..· Drop in shipments follows rise in Indian buyers’ stocks, fall in domestic demand at end-2023 and early 2024.· Drop in imports coincides with prospect of dip in supplies from Saudi Arabia and signs of slowdown in shipments from Taiwan to India in coming weeks.· Prospect of slowdown in shipments from regular suppliers, as well as increasingly competitive US prices, boost attraction of securing more supplies from US.· India’s February imports of Group I base oils from Russia and Mideast Gulf stay higher than usual, more than covering for slowdown in shipments from Thailand..Asia base oils demand outlook: Week of March 18.Global base oils margins outlook: Week of March 18.Global base oils arb outlook: Week of March 18
