· Asia’s base oils supply likely to improve amid signs of steady-to-higher shipments from northeast Asia, healthy availability in China.· Group I base oils supply could stay tighter if arbitrage from Europe closes and supplies from Japan stay lower.· Asia’s Group II price premium to gasoil stays well below year-earlier levels, curbing incentive for a more substantial rise in output.· Arbitrage from Asia to overseas markets like Europe and Americas improves but stays hard to work.· Limited arbitrage opportunities could trigger faster rise in surplus supplies in Asia if region is unable to absorb current volumes.· South Korea’s base oils exports show signs of rising in March 2024, with pick-up in flows to India and China.· Recovery in Taiwan’s base oils exports shows signs of extending into April 2024.· Thailand’s base oils exports should improve following completion of recent plant maintenance work and likely seasonal slowdown in domestic demand.· Singapore’s base oils exports stay unusually low in early April 2024 for a second week.· Slowdown likely keeps Singapore’s monthly exports lower than usual in March 2024 for a second month.· Drop in base oils exports could slow pace of any regional supply-build in Q2 2024..· China’s paraffinic base oils supply rises in March 2024 to second-highest level in 27 months..· Rising domestic production cuts further China’s requirements for overseas supplies, especially of Group II and Group III base oils.· China’s March Group I base oils output falls to seven-month low, with maintenance work on a key Group I unit starting at the end of last month..· Group I output could fall further in April 2024 while the unit remains offline for maintenance work.· China’s firm domestic Group I prices relative to diesel, relative to Group II prices and relative to FOB Asia prices suggest supply-demand fundamentals are already tight..· Japan’s February base oils output falls to 27-month low even with no plant maintenance.· Output falls as plant closures cut structural production capacity.· Japan’s February base oils supply stays unusually low even with rebound in imports..· Low supply leaves country focused on covering domestic requirements, curbs availability of supplies for export.· Low supply likely to support rising requirements for premium-grade imports, with South Korea and Qatar the key beneficiaries..· Thailand’s February base oils supply falls to fifteen-month low, limiting export volumes and compounding the drop in Japan’s base oils output.· Thailand’s base oils supply outpaces demand only because lower-than-usual exports cut total demand to a fifteen-month low..· Seasonal rise in domestic demand likely limited size of recovery in Thailand’s surplus supply in March 2024..· Singapore takes delivery of another cargo from Italy at end-March/early April 2024.· Shipments of Group I base oils from European sources like Italy help to cushion drop in availability in Asia-Pacific.· Shipments from Europe face prospect of slowing as surplus supply in that market tightens..Asia base oils demand outlook: Week of April 8.Global base oils arb outlook: Week of April 8.Global base oils margins outlook: Week of April 8
· Asia’s base oils supply likely to improve amid signs of steady-to-higher shipments from northeast Asia, healthy availability in China.· Group I base oils supply could stay tighter if arbitrage from Europe closes and supplies from Japan stay lower.· Asia’s Group II price premium to gasoil stays well below year-earlier levels, curbing incentive for a more substantial rise in output.· Arbitrage from Asia to overseas markets like Europe and Americas improves but stays hard to work.· Limited arbitrage opportunities could trigger faster rise in surplus supplies in Asia if region is unable to absorb current volumes.· South Korea’s base oils exports show signs of rising in March 2024, with pick-up in flows to India and China.· Recovery in Taiwan’s base oils exports shows signs of extending into April 2024.· Thailand’s base oils exports should improve following completion of recent plant maintenance work and likely seasonal slowdown in domestic demand.· Singapore’s base oils exports stay unusually low in early April 2024 for a second week.· Slowdown likely keeps Singapore’s monthly exports lower than usual in March 2024 for a second month.· Drop in base oils exports could slow pace of any regional supply-build in Q2 2024..· China’s paraffinic base oils supply rises in March 2024 to second-highest level in 27 months..· Rising domestic production cuts further China’s requirements for overseas supplies, especially of Group II and Group III base oils.· China’s March Group I base oils output falls to seven-month low, with maintenance work on a key Group I unit starting at the end of last month..· Group I output could fall further in April 2024 while the unit remains offline for maintenance work.· China’s firm domestic Group I prices relative to diesel, relative to Group II prices and relative to FOB Asia prices suggest supply-demand fundamentals are already tight..· Japan’s February base oils output falls to 27-month low even with no plant maintenance.· Output falls as plant closures cut structural production capacity.· Japan’s February base oils supply stays unusually low even with rebound in imports..· Low supply leaves country focused on covering domestic requirements, curbs availability of supplies for export.· Low supply likely to support rising requirements for premium-grade imports, with South Korea and Qatar the key beneficiaries..· Thailand’s February base oils supply falls to fifteen-month low, limiting export volumes and compounding the drop in Japan’s base oils output.· Thailand’s base oils supply outpaces demand only because lower-than-usual exports cut total demand to a fifteen-month low..· Seasonal rise in domestic demand likely limited size of recovery in Thailand’s surplus supply in March 2024..· Singapore takes delivery of another cargo from Italy at end-March/early April 2024.· Shipments of Group I base oils from European sources like Italy help to cushion drop in availability in Asia-Pacific.· Shipments from Europe face prospect of slowing as surplus supply in that market tightens..Asia base oils demand outlook: Week of April 8.Global base oils arb outlook: Week of April 8.Global base oils margins outlook: Week of April 8