· Asia’s heavy-grade base oils prices hold firm versus feedstock/gasoil prices.· Asia’s Group II light-grade prices slip vs feedstock/gasoil prices faster than heavy grades and faster than Group I light grades.· Supply-demand fundamentals likely to improve for light and heavy grades in coming weeks as plant maintenance draws to a close and demand slows.· Even so, mixed price dynamics point to still-tight heavy-grade supplies and margins that incentivize refiners to boost output of the product.· Pressure on light-grade price-differentials point to rising surplus supply and need to create more arbitrage outlets for those supplies.· FOB Asia Group II light-grade prices could face more pressure amid signs of weaker buying interest in markets like Middle East.· FOB Asia Group II light-grade price-discount to CFR UAE price weakens in mid-May 2025 to narrowest level in more than a month..· Narrower price discount complicates arbitrage at same time as supply-demand fundamentals weaken..· Easing supply-demand fundamentals would contrast with unusually tight fundamentals in Q1 2025 and in early Q2 2025.· Asia’s base oils supply falls in Q1 2025 to lowest level since H1 2021..· Lower supply contrasts with rising regional demand in Q1 2025.· Net supply duly falls to three-year low in March 2025, leaving supply-surplus in Q1 2025 even lower than already-low levels in Q1 2024..· Factors supporting tight net supply early this year are set to reverse in coming weeks.· Prospect of pick-up in surplus supply would boost need for drop in production or rise in arbitrage shipments to avoid build-up of surplus volumes..· Taiwan’s base oils shipments hold firm so far in May 2025, maintaining higher-than-usual export volumes since Feb 2025.· Singapore’s base oils exports over last four weeks rise to highest since end-March 2025 on pick-up in supplies from domestic refiners..· Exports from domestic refiners would likely need to stay at more elevated levels to balance out impact of sharp slowdown in imports from Europe and US since early-April 2025.· Imports from those two markets stay unusually low in four weeks to mid-May 2025, following surge in shipments since late-2024..· Slowdown in imports from those markets could curb volume of Singapore’s re-exported supplies in coming weeks.· Singapore’s imports from key sources of Group I base oils extend fall over last four weeks to lowest since Q1 2024..· Slowdown in shipments precedes maintenance work on key Group I plant in Thailand in May 2025.· Slowdown in shipments to Singapore and plant maintenance in Thailand highlight Asia’s ongoing supply-tightness for Group I base oils..· Thailand’s Group I base oils supply, or output less domestic and overseas demand, already falls in March 2025 to seven-month low..· Lower supply precedes Group I plant maintenance work in Thailand and Middle East in Q2 2025.· Plant maintenance, combined with ongoing need to cover domestic requirements, usually triggers sharp fall in exports.· Recent signs of improving availability of spot cargoes from producers in southeast Asia could point to weak demand cushioning impact of plant maintenance work..· South Korea’s base oils exports stay low in April 2025 for fourth time in five months..· Lower exports add to Asia’s tight supply-demand fundamentals in Jan-April 2025.· South Korea’s exports could now start to revive following completion of Group II maintenance work.· Expectations of improving supply fundamentals in Asia, and seasonal slowdown in demand in coming weeks, could add to refiners’ incentive to speed up exports at current price levels.· Any such moves could help to keep the refiners’ stocks at lower levels, curbing any pressure to make large price adjustments in several weeks' time to clear surplus volumes.· Any such moves could also trigger faster rise in exports, putting pressure on prices in the more immediate term..· South Korea’s base oils exports to southeast Asia rise to three-month high in April 2025..· Revival in shipments from South Korea could be a factor triggering lower exports from Singapore to southeast Asia in April 2025.· South Korea’s export volume to southeast Asia in April 2025 exceeds Singapore’s export volume for first time in three months.· Any sustained pick-up in shipments from South Korea to southeast Asia could intensify competition for market share in that region, ahead of expected rise in Singapore’s Group II base oils production capacity later this year..Asia’s March lube demand falls.S Korea’s April base oil exports stay low.Thailand’s March lube demand falls.Asia base oils demand outlook: Week of 19 May.Asia base oils supply outlook: Week of 12 May
