· China’s Shandong diesel premium to crude oil holds at three-month high, contrasting with sliding base oils values..· Weak base oils margins incentivize more refiners to cut base oils supply, adding to offline production for plant maintenance work.· Regional supply shows signs of staying more balanced in Q3 2023, contrasting with large build-up in Q2-Q3 2022.· Trend boosts refiners’ leverage when demand gets seasonal boost in coming weeks.· China’s base oils output shows signs of falling in August amid wave of shutdowns/delayed plant restarts..· Asia’s June base oils exports fall to six-month low; lower shipments could reflect moves by refiners to hold back supplies..· Lower exports more likely reflect regional refiners’ lower supply; trend leaves refiners and blenders with lower stocks heading into Q3 2023..· Slump in South Korea’s July base oils exports to three-year low partly reflects impact of plant maintenance that drew to a close in July..· Size of fall in exports points to run-cuts amongst other refiners at a time when base oils prices were at a discount to diesel.· Size of fall in exports could also reflect stock-building ahead of additional plant maintenance work in August.· Sustained and sharp fall in base oils exports counters impact of seasonal slowdown in demand, limiting any supply-build..· Taiwan’s July base oils exports fall to one-year low, adding to slowdown in regional supplies.· Sliding exports counter impact of weak Chinese demand, curb need to redirect supplies to other more distant markets.· Sliding exports include ongoing dearth of shipments to Americas, contrasting with pick-up in shipments to that region throughout 2H 2022..· Supply in southeast Asia shows signs of holding steadier as refiners tap firmer demand compared with China.· South Korea’s July base oils exports to southeast Asia edge down from June, contrasting with slump in its shipments to China..· Trend leaves South Korea’s exports to southeast Asia exceeding volumes to China for fourth time in five months.· Trend leaves South Korea’s exports to southeast Asia accounting for 28pc share of total volume, up from typical levels of around 22pc..· India’s July Group II base oils imports rise to highest in more than two years, with surge in shipments of light grades from Asia and US, and mid-viscosity grades from US..· Wave of arbitrage shipments boosts Indian buyers’ inventories well ahead seasonal rise in demand from end-Q3 2023.· Indian buyers’ higher stocks could curb urgency to lock in more supplies if prices rise.· Wave of Group II mid-viscosity-grade shipments from US reflect that market’s persistent overhang of the product and limited outlets for the supplies. .· Singapore’s base oils exports surge in four weeks to mid-August to highest in almost five months..· Unusually extreme volatility of Singapore’s base oils exports raises uncertainty about shipments over coming weeks..Global base oils - week of Aug 21: Price outlook - margins
