Asia base oils supply outlook: Week of 1 September

·         Asia’s base oils prices hold firm versus Singapore gasoil prices.

·         Firm base oil margins so far in Q3 2025 point to fundamentals that remain sufficiently balanced and that curb need for lower output levels.

·         Firm margins coincide with signs of relatively steady base oils output in early-Q3 2025 even after completion of most plant-maintenance work.

·         Steady output coincides with signs of firmer-than-expected demand in early-Q3 2025, limiting pace of build-up of surplus supplies.

·         Suppliers still faced challenge of managing impact of typical seasonal slowdown in demand in month of August.

·         Even so, smaller surplus at outset better enables them to manage seasonal dip in demand.

·         Seasonal rise in demand at end-Q3 could further facilitate moves to manage supply-surplus.

·         Arbitrage from Asia to Americas stays hard to work.

·         More limited arbitrage opportunities add to signs of supply-demand fundamentals that remain relatively balanced.

·         Even so, steady base oils output, combined with any signs of more muted seasonal rise in demand in coming weeks, could extend pick-up in surplus supplies.

·         Scenario would increase importance of other moves to maintain balanced fundamentals, such as adjustments to output levels.

·         Taiwan’s base oils exports extend strong pick-up in late-Aug 2025 after lull in mid-month.

·         Rise in shipments leaves total exports at high levels that are similar to recent months.

·         Singapore’s base oils exports show signs of staying lower than usual in Aug 2025 for second month.

·         Lower exports coincide with start-up of new base oils unit in the island-state.

·         Lower exports partially cushion impact of seasonal slowdown in regional demand in month of August.

·         Singapore’s base oils supply gets boost from strong pick-up in shipments from Europe in Aug 2025.

·         Rise in imports from Europe contrasts slowdown in shipments from US so far in Q3 2025.

·         Slowdown in shipments from US contrasts with surge in imports from US and Europe in Q2 2025.

·         Japan’s base oils exports fall to multi-year low in July 2025.

·         Exports fall as domestic output barely manages to cover domestic demand.

·         Sustained fall in Japan’s base oils exports leave total shipments increasingly similar to export-volumes from China.

·         Converging export volumes highlight contrasting trends between Japan and China’s base oils production capacity.

·         Japan’s base oils stocks extend fall in July 2025 even with drop in exports.

·         Dynamic highlights fall in exports because of tighter supply.

·         Dynamic contrasts with South Korea’s fall in exports despite rising supply.

·         South Korea’s base oils output rises to one-year high in July 2025.

·         South Korea’s exports stay lower in July 2025 as strong domestic demand and round of stock-replenishment absorb more domestic supply.

·         Those factors likely to have less impact on supply at least in Aug 2025.

·         Prospect of steady or higher base oils output could then trigger rise in exports.

·         Steady or higher output and still-low exports could conversely point to growing build-up of additional stocks.

·         India’s base oils output rises to four-month high in July 2025.

·         Shortfall of domestic output vs India’s lube demand still widens in July 2025.

·         Widening shortfall highlights India’s growing reliance on imports to cover demand.

·         Expected start-up of new domestic base oils production capacity in coming months would help to cut shortfall, trimming requirements for imports.

·         Large supply-shortfall and India’s growing demand raises prospect of ongoing reliance on large volume of imports to cover domestic requirements.

·         Base oils shipments from Saudi Arabia’s ports of Yanbu/Jeddah fall to one-year-low in July 2025.

·         Drop in exports compounds signs of dip in shipments to India amid slowdown in flows from Iran, as well as fall in Asia’s exports to India in July 2025.

·         Base oils shipments from Yanbu/Jeddah could stay lower than usual in coming months ahead of and during planned plant-shutdown in Q4 2025.