· Asia’s base oils price-premium to Singapore gasoil price stays at elevated levels for heavy grades, lower-than-usual levels for light grades.· Base oils margins incentivize refiners to maintain higher production levels for heavy grades, and to consider adjusting production levels for light grades.· Any such moves to maintain or adjust output would coincide with rise in regional production capacity following completion of most plant-maintenance work.· Any rise in supply would coincide with seasonal slowdown in demand.· Any rise in surplus supply increases importance of outlets for arbitrage shipments.· Firm prices for shipments to India and China could support more arbitrage flows to those markets. · Arbitrage to move surplus supplies to more distant outlets like Middle East and Americas stays marginal for light grades, difficult for heavy grades..· Pace of Group II exports from Taiwan revives since end-June 2025, with heavy grades accounting for larger share of total shipments in recent weeks.· Exports could see slowdown as major storm disrupts cargo-loadings in recent days.· Singapore’s weekly base oils exports fall in past week to lowest in five months.· Slowdown follows unusual surge in exports the previous week.· Any extension of slowdown could point to other factors besides timing of shipments.· Even with slowdown, Singapore’s base oils exports stay higher than usual over last four weeks..· Re-exports of supplies that originated from outside Singapore fall as share of total exports over last four weeks..· Drop in share is first in a month and follows rise in re-exports’ share of total exports at end-June 2025 to highest in almost two years.· Lower share of exports follows dip in Singapore’s base oils imports in Q2 2025, including almost-complete pause in shipments from US and Europe..· An extension of slowdown in imports could trigger further fall in Singapore’s re-exports as share of total shipments.· Any such slowdown would require rise in shipments from domestic sources in the island-state to sustain its high total export volumes..· Japan’s base oils output falls to three-month low in May 2025, falls 5% in Jan-May 2025..· Lower output mirrors trend throughout Asia in H1 2025 amid protracted round of plant-maintenance work.· Asia’s base oils output falls more than 3% in Jan-May 2025, extending trend of lower output throughout the region in recent years..· Lower output cuts surplus supply, curbs need for FOB Asia cargo prices to hold at levels that facilitate arbitrage shipments.· Lower output instead facilitates more arbitrage shipments from US to outlets like India.· Trend could change in coming months following completion of plant-maintenance work and as new production capacity starts to come online..· Thailand’s base oils output likely to fall in July-Aug 2025 because of scheduled plant maintenance.· Impact of plant maintenance could be more muted because of weaker demand and stock-building ahead of plant-shutdown.· Thailand’s Group I base oils supply, or output less domestic and overseas demand, rises in May 2025 to third-highest level since 2022..· Rise in surplus supply in April-May 2025 leaves Thailand with larger buffer to cover for drop in output in coming weeks..· India’s base oils output likely to recover after dipping in Q2 2025 during round of plant-maintenance work.· India’s base oils output stays lower than usual in May 2025 for third time in four months, reflecting impact of maintenance work..· Rise in base oils imports balances out lower output, leaving supply rangebound..· Output likely to rise in Q3 2025 following completion of plant-maintenance work.· Output likely to get further boost in Q4 2025 following expected start-up of new production capacity.· Higher output could curb requirements for supplies from overseas markets..· Asia’s Group III base oils supply likely holds at healthy levels in Q2 2025 despite increasingly weak regional prices.· Asia’s Group III base oils imports from Middle East hold firm in May 2025, lifting shipments in three months to May 2025 to sixteen-month high..· Rising supply likely boosts stocks, cushions impact of Group III plant-maintenance work in Middle East during Q2 2025.· Asia Group III base oils prices weaken relative to other key regions in Q2 2025..· Price-weakness suggests Asia’s supply is more than sufficient to meet demand during that period.· Ongoing price-weakness at start of July 2025 suggests weak fundamentals extend into start of Q3..Asia base oils demand outlook: Week of 7 July.Japan’s May base oils output falls.Thailand May base oil supply stays high.India’s May base oils supply matches demand
· Asia’s base oils price-premium to Singapore gasoil price stays at elevated levels for heavy grades, lower-than-usual levels for light grades.· Base oils margins incentivize refiners to maintain higher production levels for heavy grades, and to consider adjusting production levels for light grades.· Any such moves to maintain or adjust output would coincide with rise in regional production capacity following completion of most plant-maintenance work.· Any rise in supply would coincide with seasonal slowdown in demand.· Any rise in surplus supply increases importance of outlets for arbitrage shipments.· Firm prices for shipments to India and China could support more arbitrage flows to those markets. · Arbitrage to move surplus supplies to more distant outlets like Middle East and Americas stays marginal for light grades, difficult for heavy grades..· Pace of Group II exports from Taiwan revives since end-June 2025, with heavy grades accounting for larger share of total shipments in recent weeks.· Exports could see slowdown as major storm disrupts cargo-loadings in recent days.· Singapore’s weekly base oils exports fall in past week to lowest in five months.· Slowdown follows unusual surge in exports the previous week.· Any extension of slowdown could point to other factors besides timing of shipments.· Even with slowdown, Singapore’s base oils exports stay higher than usual over last four weeks..· Re-exports of supplies that originated from outside Singapore fall as share of total exports over last four weeks..· Drop in share is first in a month and follows rise in re-exports’ share of total exports at end-June 2025 to highest in almost two years.· Lower share of exports follows dip in Singapore’s base oils imports in Q2 2025, including almost-complete pause in shipments from US and Europe..· An extension of slowdown in imports could trigger further fall in Singapore’s re-exports as share of total shipments.· Any such slowdown would require rise in shipments from domestic sources in the island-state to sustain its high total export volumes..· Japan’s base oils output falls to three-month low in May 2025, falls 5% in Jan-May 2025..· Lower output mirrors trend throughout Asia in H1 2025 amid protracted round of plant-maintenance work.· Asia’s base oils output falls more than 3% in Jan-May 2025, extending trend of lower output throughout the region in recent years..· Lower output cuts surplus supply, curbs need for FOB Asia cargo prices to hold at levels that facilitate arbitrage shipments.· Lower output instead facilitates more arbitrage shipments from US to outlets like India.· Trend could change in coming months following completion of plant-maintenance work and as new production capacity starts to come online..· Thailand’s base oils output likely to fall in July-Aug 2025 because of scheduled plant maintenance.· Impact of plant maintenance could be more muted because of weaker demand and stock-building ahead of plant-shutdown.· Thailand’s Group I base oils supply, or output less domestic and overseas demand, rises in May 2025 to third-highest level since 2022..· Rise in surplus supply in April-May 2025 leaves Thailand with larger buffer to cover for drop in output in coming weeks..· India’s base oils output likely to recover after dipping in Q2 2025 during round of plant-maintenance work.· India’s base oils output stays lower than usual in May 2025 for third time in four months, reflecting impact of maintenance work..· Rise in base oils imports balances out lower output, leaving supply rangebound..· Output likely to rise in Q3 2025 following completion of plant-maintenance work.· Output likely to get further boost in Q4 2025 following expected start-up of new production capacity.· Higher output could curb requirements for supplies from overseas markets..· Asia’s Group III base oils supply likely holds at healthy levels in Q2 2025 despite increasingly weak regional prices.· Asia’s Group III base oils imports from Middle East hold firm in May 2025, lifting shipments in three months to May 2025 to sixteen-month high..· Rising supply likely boosts stocks, cushions impact of Group III plant-maintenance work in Middle East during Q2 2025.· Asia Group III base oils prices weaken relative to other key regions in Q2 2025..· Price-weakness suggests Asia’s supply is more than sufficient to meet demand during that period.· Ongoing price-weakness at start of July 2025 suggests weak fundamentals extend into start of Q3..Asia base oils demand outlook: Week of 7 July.Japan’s May base oils output falls.Thailand May base oil supply stays high.India’s May base oils supply matches demand
