· Asia’s Group I/II heavy-grade prices stay unusually high relative to gasoil prices.· Sustained price-strength points to tight supply even with refiners incentivized to increase base oils output.· Asia’s base oils supply from regional refiners shows signs of staying lower than usual so far in Sept 2024.· Start or continuation of regional plant shutdowns set to curb output over coming weeks.· Closed arbitrage from US continues to curb flow of additional arbitrage shipments from that market to Asia. · Signs of additional arbitrage shipments from Asia to Americas in Sept 2024 curbs further size of any surplus volumes.· Arbitrage to Americas could get harder to work as falling US prices increase risk of lining up additional shipments to that market.· Sustained flow of shipments from US and Europe to southeast Asia in Sept 2024 cushions impact of lower supply..· Singapore’s four-week base oils exports extend recovery in mid-Sept 2024, mostly because of surge in re-exports to highest since early-June 2024..· High re-export volume in early-June 2024 coincided with high domestic base oils exports at that time.· High re-exports in mid-Sept 2024 coincide with unusually low domestic exports.· Contrasting trends trigger rise in re-exports as share of Singapore’s total exports to highest since Nov 2023..· Rise in Singapore’s re-exports follows surge in island-state’s base oils imports in recent weeks.· Imports include arrival in past week of largest shipment from Italy since start of 2024.· Shipment follows delivery of cargoes from Netherlands and US the previous week.· Shipments move to Singapore despite closed arbitrage from US and Europe to Asia..· South Korea’s base oils exports rise to eighteen-month high in Aug 2024..· Rebound in exports helps to remove build-up of surplus volumes after shipments lag South Korea’s rising base output during the previous two months.· Asia’s base oils prices extend rise vs feedstock/competing fuel prices during Q3 2024 even with surge in South Korea’s base oils exports.· Sustained price strength implies balanced-to-tight fundamentals, which points to tighter supply from other sources.· Removal of large portion of South Korea’s surplus volumes in Aug 2024 cuts supply-buffer to cover for planned shutdown of one of the country’s key base oils unit from Sept 2024.· Shutdown of base oils unit, and subsequent drop in output over coming weeks, duly likely to have larger impact on regional supply during that period..· Taiwan’s base oils exports show signs of reverting to more typical levels in Sept 2024, following surge in shipments during each of previous two months.· China’s base oils exports show signs of slowing ahead of upcoming closure of major Group I plant in the country in Oct 2024.· Japan’s base oils exports show signs of slowing in recent weeks.· Slowdown points to tighter supply following unplanned shutdown of key base oils unit in Japan since early July 2024..Asia base oils demand outlook: Week of 23 Sept.S Korea’s August base oils exports rise
· Asia’s Group I/II heavy-grade prices stay unusually high relative to gasoil prices.· Sustained price-strength points to tight supply even with refiners incentivized to increase base oils output.· Asia’s base oils supply from regional refiners shows signs of staying lower than usual so far in Sept 2024.· Start or continuation of regional plant shutdowns set to curb output over coming weeks.· Closed arbitrage from US continues to curb flow of additional arbitrage shipments from that market to Asia. · Signs of additional arbitrage shipments from Asia to Americas in Sept 2024 curbs further size of any surplus volumes.· Arbitrage to Americas could get harder to work as falling US prices increase risk of lining up additional shipments to that market.· Sustained flow of shipments from US and Europe to southeast Asia in Sept 2024 cushions impact of lower supply..· Singapore’s four-week base oils exports extend recovery in mid-Sept 2024, mostly because of surge in re-exports to highest since early-June 2024..· High re-export volume in early-June 2024 coincided with high domestic base oils exports at that time.· High re-exports in mid-Sept 2024 coincide with unusually low domestic exports.· Contrasting trends trigger rise in re-exports as share of Singapore’s total exports to highest since Nov 2023..· Rise in Singapore’s re-exports follows surge in island-state’s base oils imports in recent weeks.· Imports include arrival in past week of largest shipment from Italy since start of 2024.· Shipment follows delivery of cargoes from Netherlands and US the previous week.· Shipments move to Singapore despite closed arbitrage from US and Europe to Asia..· South Korea’s base oils exports rise to eighteen-month high in Aug 2024..· Rebound in exports helps to remove build-up of surplus volumes after shipments lag South Korea’s rising base output during the previous two months.· Asia’s base oils prices extend rise vs feedstock/competing fuel prices during Q3 2024 even with surge in South Korea’s base oils exports.· Sustained price strength implies balanced-to-tight fundamentals, which points to tighter supply from other sources.· Removal of large portion of South Korea’s surplus volumes in Aug 2024 cuts supply-buffer to cover for planned shutdown of one of the country’s key base oils unit from Sept 2024.· Shutdown of base oils unit, and subsequent drop in output over coming weeks, duly likely to have larger impact on regional supply during that period..· Taiwan’s base oils exports show signs of reverting to more typical levels in Sept 2024, following surge in shipments during each of previous two months.· China’s base oils exports show signs of slowing ahead of upcoming closure of major Group I plant in the country in Oct 2024.· Japan’s base oils exports show signs of slowing in recent weeks.· Slowdown points to tighter supply following unplanned shutdown of key base oils unit in Japan since early July 2024..Asia base oils demand outlook: Week of 23 Sept.S Korea’s August base oils exports rise
