· Asia’s base oils price premium to feedstock/competing fuel prices stays high, incentivizing refiners to maintain high output levels.· Incentive to maintain high output coincides with signs of lower supply because of stock-building and recent/ongoing/upcoming plant maintenance throughout the region.· Open arbitrage to overseas outlets like Americas could trim further Asia’s base oils supply.· Supply could face further squeeze if Group I plant in China undergoes prolonged shutdown or closure..· China’s imports from Thailand, Indonesia and Japan average more than 10,000 tonnes/month in first seven months of 2024..· Shipments point to ongoing requirements for Group I base oils, even if demand is weaker than before.· A shutdown or closure of Group I plant in China would likely trigger rise in requirements from overseas markets..· Singapore’s base oils exports fall sharply in four weeks to end-Aug 2024 vs July 2024, drop below average monthly volumes in 2024..· Singapore takes delivery over past week of large cargo from Russia.· Shipment adds to region’s Group I supplies..· South Korea’s base oils exports show signs of staying lower than usual in Aug 2024.· South Korea’s base oils output rises to two-year high in July 2024.· Rising output contrasts with lower exports in June-July 2024..· Rising output, lower exports and firm prices point to balanced-to-tight supply-demand fundamentals.· Dynamic points to stock-building ahead of and to cover for planned shutdown of Group II unit in South Korea from mid-Sept 2024.· South Korea’s exports to US rise to seven-month high in July 2024; its shipments to the US mostly consist of Group III base oils.· India’s Group II imports from South Korea fall in July 2024, while Group III imports hold steady..· Those recent trade flows suggest South Korea’s stock-building consists more of Group II base oils..· Japan’s base oils output edges up in July 2024 from June 2024, falls for sixteenth month from year-earlier levels..· Output likely to extend fall over following months amid ongoing, extended shutdown of one of the country's key base oils units..· Taiwan’s base oils exports stay higher than usual in Aug 2024, following surge in shipments in July 2024.· Taiwan’s shipments in Aug 2024 include rebound in exports to China..· India’s base oils output likely recovers in Aug 2024 after falling to three-year low in July 2024..· Output falls because of plant shutdown that involved adding new production capacity to the refinery.· Move is first of wave of new capacity additions for India’s refineries over the coming year..Asia base oils demand outlook: Week of 2 Sept.Japan’s July base oils supply stays lower.S Korea’s July base oils output rises
· Asia’s base oils price premium to feedstock/competing fuel prices stays high, incentivizing refiners to maintain high output levels.· Incentive to maintain high output coincides with signs of lower supply because of stock-building and recent/ongoing/upcoming plant maintenance throughout the region.· Open arbitrage to overseas outlets like Americas could trim further Asia’s base oils supply.· Supply could face further squeeze if Group I plant in China undergoes prolonged shutdown or closure..· China’s imports from Thailand, Indonesia and Japan average more than 10,000 tonnes/month in first seven months of 2024..· Shipments point to ongoing requirements for Group I base oils, even if demand is weaker than before.· A shutdown or closure of Group I plant in China would likely trigger rise in requirements from overseas markets..· Singapore’s base oils exports fall sharply in four weeks to end-Aug 2024 vs July 2024, drop below average monthly volumes in 2024..· Singapore takes delivery over past week of large cargo from Russia.· Shipment adds to region’s Group I supplies..· South Korea’s base oils exports show signs of staying lower than usual in Aug 2024.· South Korea’s base oils output rises to two-year high in July 2024.· Rising output contrasts with lower exports in June-July 2024..· Rising output, lower exports and firm prices point to balanced-to-tight supply-demand fundamentals.· Dynamic points to stock-building ahead of and to cover for planned shutdown of Group II unit in South Korea from mid-Sept 2024.· South Korea’s exports to US rise to seven-month high in July 2024; its shipments to the US mostly consist of Group III base oils.· India’s Group II imports from South Korea fall in July 2024, while Group III imports hold steady..· Those recent trade flows suggest South Korea’s stock-building consists more of Group II base oils..· Japan’s base oils output edges up in July 2024 from June 2024, falls for sixteenth month from year-earlier levels..· Output likely to extend fall over following months amid ongoing, extended shutdown of one of the country's key base oils units..· Taiwan’s base oils exports stay higher than usual in Aug 2024, following surge in shipments in July 2024.· Taiwan’s shipments in Aug 2024 include rebound in exports to China..· India’s base oils output likely recovers in Aug 2024 after falling to three-year low in July 2024..· Output falls because of plant shutdown that involved adding new production capacity to the refinery.· Move is first of wave of new capacity additions for India’s refineries over the coming year..Asia base oils demand outlook: Week of 2 Sept.Japan’s July base oils supply stays lower.S Korea’s July base oils output rises
