· China’s Shandong diesel premium to crude oil holds firm, contrasting with unusually weak domestic base oils premium to diesel.· Maintenance-work in September includes plants in China and Japan. · Low base oils margins likely to incentivize extended shutdowns or run-cuts, especially for light grades..· Asia’s June base oils supply surplus over demand already falls to narrowest in four months..· Smaller supply surplus leaves refiners better positioned to manage seasonal slowdown in demand during Q3 2023.· Smaller surplus gives refiners more leverage to avoid sharp price-correction, and to instead target steady-to-higher prices.· Smaller surplus eases buyers’ concerns about exposure to sharp fall in prices, likely to support steadier demand..· Singapore’s July base oils exports fall to three-month low, stay much lower than pre-2020 levels..· Slowdown in shipments coincides with slump in South Korea’s July exports, raising prospect of tighter regional supply during Q3 2023..· Fall in China’s July base oils imports coincides with drop in domestic base oils output in July, cutting domestic supply to five-month low..· Additional plant maintenance work in China during Q3 2023 likely to curb size of any recovery in domestic output.· Trend raises prospect of buyers relying more on base oils imports to cover requirements, especially if demand rises more than expected.· Trend highlights how weak Chinese demand impacts domestic refiners more than regional refiners, which have easier access to other markets.· Trend could leave regional refiners better positioned to cover China’s domestic demand..· India’s July base oils supply rises to four-month high even as domestic output falls..· Rising supply coincides with typical seasonal slowdown in demand during monsoon season in Q3 2023.· Rising supply leaves blenders with healthy stocks ahead of pick-up in consumption from end of third quarter.· India’s imports from US show signs of staying high in August, then slowing in September.· Slowdown in supplies from US could continue amid less attractive arbitrage..Global base oils - week of Aug 28: Price outlook - margins
· China’s Shandong diesel premium to crude oil holds firm, contrasting with unusually weak domestic base oils premium to diesel.· Maintenance-work in September includes plants in China and Japan. · Low base oils margins likely to incentivize extended shutdowns or run-cuts, especially for light grades..· Asia’s June base oils supply surplus over demand already falls to narrowest in four months..· Smaller supply surplus leaves refiners better positioned to manage seasonal slowdown in demand during Q3 2023.· Smaller surplus gives refiners more leverage to avoid sharp price-correction, and to instead target steady-to-higher prices.· Smaller surplus eases buyers’ concerns about exposure to sharp fall in prices, likely to support steadier demand..· Singapore’s July base oils exports fall to three-month low, stay much lower than pre-2020 levels..· Slowdown in shipments coincides with slump in South Korea’s July exports, raising prospect of tighter regional supply during Q3 2023..· Fall in China’s July base oils imports coincides with drop in domestic base oils output in July, cutting domestic supply to five-month low..· Additional plant maintenance work in China during Q3 2023 likely to curb size of any recovery in domestic output.· Trend raises prospect of buyers relying more on base oils imports to cover requirements, especially if demand rises more than expected.· Trend highlights how weak Chinese demand impacts domestic refiners more than regional refiners, which have easier access to other markets.· Trend could leave regional refiners better positioned to cover China’s domestic demand..· India’s July base oils supply rises to four-month high even as domestic output falls..· Rising supply coincides with typical seasonal slowdown in demand during monsoon season in Q3 2023.· Rising supply leaves blenders with healthy stocks ahead of pick-up in consumption from end of third quarter.· India’s imports from US show signs of staying high in August, then slowing in September.· Slowdown in supplies from US could continue amid less attractive arbitrage..Global base oils - week of Aug 28: Price outlook - margins
