· China’s Shandong diesel prices rise faster than crude over past month; premium to crude rises close to average levels so far this year.· China’s imposition of consumption tax on industrial white oils increases costs, incentivizes Chinese refiners to cut white oil/base oil run-rates.· Impact of any run-cuts likely to be felt in coming weeks when demand is set to get a seasonal boost.· India’s retail diesel premium to crude stays unusually high.· Slowdown in regional plant maintenance work in Q3 2023 cushioned by additional/extended shutdowns and signs of slowdown in supplies from some key producers.· Singapore’s June base oils exports to southeast Asia exceed shipments to China and India combined for a second month..· Trend highlights growing size and importance of southeast Asia market at a time when Chinese demand is stuttering and India’s domestic supply is set to rise.· Singapore’s base oils exports show signs of slowing in last four weeks compared with May and June, even after completion of plant maintenance work in Q2 2023..· Slowdown in shipments points to possibility of other factors impacting supply such as run-cuts.· Singapore’s imports of Group III base oils rebounds to almost 49,000t in Q2 2023, from unusually-low levels of less than 15,000t in Q1 2023..· Rise in flows to Singapore in Q2 2023 coincide with signs of more plentiful Group III supplies in Europe and weakening base oils prices in that region.· That trend in Europe shows signs of extending into Q3 2023, raising prospect of more Group III supplies moving to Singapore over coming months.· Surge in Group III base oils shipments from Mideast Gulf to Asia in May could reflect moves to limit supply-build in US and Europe..· Any extension of that pattern would leave Asia facing its own supply-build in Q3 2023 and add to pressure on regional prices.· India’s June base oils supply rises to second-highest in more than a year on high domestic output and imports.· India’s June supply exceeds demand for third month..· Rising surplus supply over demand likely to trigger slowdown in imports or rise in exports.· Pakistan’s revival in base oils imports from end-Q1 2023 provides valuable outlet for producers like South Korea and Singapore.· Shipments from those two markets to Pakistan show signs of slowing in three months to July..· Pakistan’s May base oils supply rises to five-month high.· Higher supply and falling demand add to prospect of slowdown in requirements..Global base oils - week of July 31: Price outlook - margins.Base Oil News stories and analysis also available on ICIS platform
