· Asia’s Group II base oils price-premium to Singapore gasoil falls amid rebound in crude and diesel prices..· Ongoing fall in outright heavy-grade prices magnifies size of dip in heavy-grade margins.· Heavy-grade margins maintain steep, even if narrowing premium to light-grade margins.· Higher margins incentivize refiners to focus on producing more heavy grades, despite persistent surplus of those supplies.· Any signs of base oils margins holding at lower levels would point to fundamentals that are insufficiently strong for refiners to raise prices in response to higher feedstock costs.· Dynamic could incentivize refiners to adjust output to boost their leverage to raise prices.· Dynamic would follow signs of recovery in Asia’s base oils supply in recent months.· Signs of slowdown in shipments from Taiwan and Singapore in recent weeks could slow pace of that recovery.· Plant-maintenance in Saudi Arabia in Nov-Dec 2025 could also leave fundamentals more balanced..· Singapore’s base oils exports extend fall in past week, pushing down total shipments over past four weeks to lowest level in more than a month..· Exports fall despite rise in Singapore’s base oils production-capacity following start-up of new unit in Sept 2025.· Any extension of slowdown in exports could point to production issues.· Even with recent slowdown in exports, Singapore’s base oils trade flows face prospect of major adjustment in coming months following start-up of new base oils unit.· Surge in Singapore’s base oils imports in Jan-Sep 2025 provides supply to support rise in island-state’s exports of shipments originating from overseas markets..· Singapore’s re-exports account for larger-than-usual share of island-state’s total exports in 2025, facilitating rise in total shipments this year..· Start-up of new unit boosts Singapore’s domestic output, curbing need for supplementary volumes from overseas markets.· Dynamic could trigger slowdown in Singapore’s base oils imports over coming months..· Singapore’s base oils imports likely to fall in Oct 2025 from previous month even with pick-up in shipments in past week..· Imports rise in past week following arrival of more shipments from US and Europe.· Arrival of additional shipments from US and Europe could point to ongoing requirements for supplementary volumes.· Ongoing requirements for supplementary volumes could suggest that new unit has yet to reach full-output levels following recent start-up in Sept 2025..· China’s Group III base oils imports account for higher share of country’s total Group III supply in Sept 2025 and Q3 2025..· Imports’ rising share of Group III base oils supply suggests that China’s domestic refiners are focusing on producing more Group II base oils instead of Group III base oils.· Focus on producing more Group II base oils could reflect that grade’s still-growing requirements and larger share of domestic base oils demand..· Focus on producing more Group II base oils could reflect more muted impact on that grade than on Group III base oils from growing electrification of China’s vehicle fleet.· Focus on producing more Group II base oils coincides with increasingly narrow Group III price-premium to Group II base oils..· Narrow price-gap between Group II and Group III base oils, and yield-loss from producing Group III base oils, adds to incentive to produce more Group II instead.· China’s focus on producing more Group II base oils could support firmer demand for overseas supplies of Group I and Group III base oils and cut requirements for Group II base oils.· Extension of that dynamic would coincide with rise in Asia’s Group II base oils production capacity following recent and upcoming start-up of more units in the region.· Scenario would put pressure on new supplies to target other markets rather than China..· Asia's Group I base oils supply gets boost from recent pick-up in availability from China.· China’s base oils exports rise to three-year-high in Sept 2025, with unusually large volume heading to Middle East..· Shipments to Middle East likely consist of Group I base oils and tap wide gap between FOB Asia and ex-tank UAE base oils prices.· Pick-up in Group I flows from Asia to Middle East curbs requirements from other regions like Europe and US.· Dynamic could complicate any pick-up in surplus volumes in those other regions..· Saudi Arabia’s base oils exports could stay lower over coming months because of scheduled maintenance work starting in Nov 2025.· Any slowdown would follow drop in exports in Sept 2025..· Rise in Asia’s base oils exports in Sept 2025 cushions impact of slowdown in shipments from Saudi Arabia.· Any extension of those same trends in Q4 2025 would cushion impact of plant-maintenance work in Saudi Arabia.· Any such extension could also provide Asia suppliers with opportunity to boost market share in more distant outlets at a time when additional new production capacity is set to come online..China’s Sept base oils demand rises.Saudi Arabia's Sept Yanbu/Jeddah base oils exports fall
