· China’s Shandong diesel price premium to crude oil rises, moves close to mid-point level so far this year.· Relatively firm diesel values contrast with weak domestic base oils values.· Trend deters domestic refiners from raising base oils output.· Taiwan’s Group II base oils unit set to undergo two months’ scheduled maintenance work starting in October.· Tighter Group II supply and improving Asia base oils prices vs diesel could incentivize other regional refiners to raise output.· Plant maintenance/closure in Japan set to curb regional Group I supplies.· Weak Group I base oils export prices incentivize other regional producers to maintain lower output.· Weak regional Group I export prices keep open arbitrage to other markets like India/Mideast Gulf, removing surplus supply from Asia market..· China’s August base oils exports to Singapore rise to one-year high..· Steady flows from China could help cushion prospect of drop in shipments from Japan following imminent closure of base oils unit in the country..· India’s August base oils supply lags demand for first time in five months..· Supply shortfall trims blenders’ inventories ahead of seasonal pick-up in lube consumption from end-Q3 2023.· Trend likely to boost blenders’ demand for overseas supplies and importance of keeping arbitrage open.· Trend likely to boost overseas refiners’ leverage to target prices that incentivize them to produce base oils..· Surge in India’s July imports from Qatar cushions slowdown in Mideast Gulf producer’s shipments to US, Europe and rest of Asia..· Shipment of larger-than-usual volume to India coincides with more muted demand and weaker Group III prices in other markets.· India’s role as outlet for surplus supplies may get more complicated following start-up of new domestic production capacity..· Singapore’s August base oils imports get boost from delivery of large volume of supplies from Netherlands and Hong-Kong..· Shipments move from Netherlands to Singapore despite steep Europe Group II price premium to Asia prices.· Shipments from Netherlands to Singapore likely help to limit size of any supply-build in Europe during Q3 2023.· Trend contrasts with wave of Group II base oils from Asia to multiple outlets in other regions during in 2H 2022..· Singapore lines up large cargo in past week bound for Nigeria.· The rare shipment coincides with tight spot availability of export cargoes in Europe.· Europe’s Group I and Group II prices also remain elevated versus Asia prices, making the arbitrage from Asia more feasible. .· South Korea displaces Singapore as Vietnam’s largest source of base oils in first eight months of the year..· Trend points to growing competition between the two key regional producers for market share in Asia’s fastest-growing markets..Global base oils - week of Oct 2: Price outlook - arbitrage
· China’s Shandong diesel price premium to crude oil rises, moves close to mid-point level so far this year.· Relatively firm diesel values contrast with weak domestic base oils values.· Trend deters domestic refiners from raising base oils output.· Taiwan’s Group II base oils unit set to undergo two months’ scheduled maintenance work starting in October.· Tighter Group II supply and improving Asia base oils prices vs diesel could incentivize other regional refiners to raise output.· Plant maintenance/closure in Japan set to curb regional Group I supplies.· Weak Group I base oils export prices incentivize other regional producers to maintain lower output.· Weak regional Group I export prices keep open arbitrage to other markets like India/Mideast Gulf, removing surplus supply from Asia market..· China’s August base oils exports to Singapore rise to one-year high..· Steady flows from China could help cushion prospect of drop in shipments from Japan following imminent closure of base oils unit in the country..· India’s August base oils supply lags demand for first time in five months..· Supply shortfall trims blenders’ inventories ahead of seasonal pick-up in lube consumption from end-Q3 2023.· Trend likely to boost blenders’ demand for overseas supplies and importance of keeping arbitrage open.· Trend likely to boost overseas refiners’ leverage to target prices that incentivize them to produce base oils..· Surge in India’s July imports from Qatar cushions slowdown in Mideast Gulf producer’s shipments to US, Europe and rest of Asia..· Shipment of larger-than-usual volume to India coincides with more muted demand and weaker Group III prices in other markets.· India’s role as outlet for surplus supplies may get more complicated following start-up of new domestic production capacity..· Singapore’s August base oils imports get boost from delivery of large volume of supplies from Netherlands and Hong-Kong..· Shipments move from Netherlands to Singapore despite steep Europe Group II price premium to Asia prices.· Shipments from Netherlands to Singapore likely help to limit size of any supply-build in Europe during Q3 2023.· Trend contrasts with wave of Group II base oils from Asia to multiple outlets in other regions during in 2H 2022..· Singapore lines up large cargo in past week bound for Nigeria.· The rare shipment coincides with tight spot availability of export cargoes in Europe.· Europe’s Group I and Group II prices also remain elevated versus Asia prices, making the arbitrage from Asia more feasible. .· South Korea displaces Singapore as Vietnam’s largest source of base oils in first eight months of the year..· Trend points to growing competition between the two key regional producers for market share in Asia’s fastest-growing markets..Global base oils - week of Oct 2: Price outlook - arbitrage