· Asia’s base oils supply likely to improve in face of firm margins and signs of more muted demand in key overseas outlets.· Arbitrage stays hard to work to move supplies to regional markets like China and India, and to more distant markets like Americas.· Rise in Asia’s base oils supply surplus could gather pace in May 2024 following completion of plant maintenance in South Korea, signs of steadier exports from Singapore.· South Korea’s base oils exports show signs of rising in May 2024 from previous month, with steady volumes to India, pick-up in flows to China, low volumes to US.· Singapore’s base oils exports show signs of rising so far in May 2024 from previous month.· Singapore’s firm base oils exports in week to mid-May 2024 get additional boost from largest volume this year of re-exports of supplies that originated from other markets.· Taiwan’s base oils exports remain more muted so far in May 2024..· Smaller supply-surplus in Asia at start of Q2 2024 cushions impact of weaker demand at that time.· Smaller surplus reflects smaller-than-usual rise in supply and seasonal rise in demand in March 2024..· Smaller surplus gives refiners more leverage to target higher prices in early Q2 2024.· A faster rise in the supply surplus would increase the need for more feasible arbitrage opportunities to key outlets in Asia and in more distant markets.· Arbitrage opportunities to China, India, Middle East and Americas remain hard to work at current price levels..· Taiwan’s April base oils exports hold relatively steady as pick-up in shipments to southeast Asia and Middle East counter slowdown in flows to China..· Arbitrage to move additional cargoes to Middle East could be more complicated amid sharp rise in supplies in that region and squeezed gap between CFR UAE and FOB NE Asia Group II prices.· Trend could leave Taiwan looking to other outlets to clear surplus supplies.· Prices in other outlets make more complicated the arbitrage to those markets..· South Korea’s April base oils exports fall to nine-month low as Group III plant maintenance work cuts supply..· South Korea’s exports of Group II base oils likely hold steadier in April 2024 amid increasingly firm base oils margins.· Firm base oils margins and lack of scheduled maintenance work until late-Q3 2024 raise prospect of pick-up in exports over coming months, especially vs year-earlier levels.· South Korea’s Group II exports fell in Q2 2023 and early Q3 2023 because of plant maintenance work..· India’s April base oils imports rise to five-month high on back of rise in supplies from unusual sources like Turkey and Indonesia..· India’s imports likely to hold firm in May 2024 as arbitrage shipments from US arrive, adding to signs of ongoing wave of supplies from South Korea and Singapore.· Surge in India’s Group I base oils imports from Indonesia in April 2024 follow sustained rise in Asia Group I prices, add to steady flow of Group I base oils shipments from Russia.· More supplies of Group I heavy neutrals of Russian origin reach India in May 2024.· Pick-up in shipments points to still-firm Group I production in Asia, that duly rises when margins are attractive. · Imports from China include large volumes of very-light grade base oils and Group III 4cSt base oils.· Such shipments from China are unusual and rare.· Any repeat of those shipments from China to India would point to additional source of very-light grade base oils and Group III base oils for India.· Any repeat of those shipments would come just months ahead of the start-up of new premium-grade production capacity in India..Asia base oils demand outlook: Week of 20 May
· Asia’s base oils supply likely to improve in face of firm margins and signs of more muted demand in key overseas outlets.· Arbitrage stays hard to work to move supplies to regional markets like China and India, and to more distant markets like Americas.· Rise in Asia’s base oils supply surplus could gather pace in May 2024 following completion of plant maintenance in South Korea, signs of steadier exports from Singapore.· South Korea’s base oils exports show signs of rising in May 2024 from previous month, with steady volumes to India, pick-up in flows to China, low volumes to US.· Singapore’s base oils exports show signs of rising so far in May 2024 from previous month.· Singapore’s firm base oils exports in week to mid-May 2024 get additional boost from largest volume this year of re-exports of supplies that originated from other markets.· Taiwan’s base oils exports remain more muted so far in May 2024..· Smaller supply-surplus in Asia at start of Q2 2024 cushions impact of weaker demand at that time.· Smaller surplus reflects smaller-than-usual rise in supply and seasonal rise in demand in March 2024..· Smaller surplus gives refiners more leverage to target higher prices in early Q2 2024.· A faster rise in the supply surplus would increase the need for more feasible arbitrage opportunities to key outlets in Asia and in more distant markets.· Arbitrage opportunities to China, India, Middle East and Americas remain hard to work at current price levels..· Taiwan’s April base oils exports hold relatively steady as pick-up in shipments to southeast Asia and Middle East counter slowdown in flows to China..· Arbitrage to move additional cargoes to Middle East could be more complicated amid sharp rise in supplies in that region and squeezed gap between CFR UAE and FOB NE Asia Group II prices.· Trend could leave Taiwan looking to other outlets to clear surplus supplies.· Prices in other outlets make more complicated the arbitrage to those markets..· South Korea’s April base oils exports fall to nine-month low as Group III plant maintenance work cuts supply..· South Korea’s exports of Group II base oils likely hold steadier in April 2024 amid increasingly firm base oils margins.· Firm base oils margins and lack of scheduled maintenance work until late-Q3 2024 raise prospect of pick-up in exports over coming months, especially vs year-earlier levels.· South Korea’s Group II exports fell in Q2 2023 and early Q3 2023 because of plant maintenance work..· India’s April base oils imports rise to five-month high on back of rise in supplies from unusual sources like Turkey and Indonesia..· India’s imports likely to hold firm in May 2024 as arbitrage shipments from US arrive, adding to signs of ongoing wave of supplies from South Korea and Singapore.· Surge in India’s Group I base oils imports from Indonesia in April 2024 follow sustained rise in Asia Group I prices, add to steady flow of Group I base oils shipments from Russia.· More supplies of Group I heavy neutrals of Russian origin reach India in May 2024.· Pick-up in shipments points to still-firm Group I production in Asia, that duly rises when margins are attractive. · Imports from China include large volumes of very-light grade base oils and Group III 4cSt base oils.· Such shipments from China are unusual and rare.· Any repeat of those shipments from China to India would point to additional source of very-light grade base oils and Group III base oils for India.· Any repeat of those shipments would come just months ahead of the start-up of new premium-grade production capacity in India..Asia base oils demand outlook: Week of 20 May
