· Asia’s base oils prices extend rise vs feedstock/competing fuel prices, adding to incentive for refiners to maximise output.· Sustained strength of base oils margins suggests fundamentals remain balanced to tight even with any pick-up in supply.· More recent rise in base oils margins likely reflects more the weakness of crude oil prices than any further tightening of base oils fundamentals.· Any subsequent impact on demand in response to high margins could ease any supply tightness. · Asia’s base oils supply faces prospect of dipping in coming weeks as plant shutdowns in the region cut output.· Open arbitrage to Latin America could divert more shipments to that region.· Arbitrage from US to Asia stays shut, curbing volume of supplementary supplies from that market.· US prices would need significant price-adjustment for arbitrage to Asia to open.· Signs of pick-up in flows from US to India could point to some such price adjustments.· Taiwan’s base oils shipments see slowdown in early Sept 2024 after jump in shipments in H2 Aug 2024.· South Korea’s base oils exports likely to fall in Sept 2024 because of scheduled plant maintenance work.· South Korea’s base oils exports already show signs of staying lower in Aug 2024.· Ongoing plant shutdown in Japan likely to curb country’s export volumes.· Japan’s base oils imports could get a boost as buyers cover for unexpected and prolonged shutdown of base oils unit.· A rise in shipments to Japan could trim availability of supplies for other markets..· Singapore’s base oils exports stay lower than usual heading into Sept 2024 and over past four weeks..· Any extension of the slowdown would coincide with likely drop in South Korea’s exports in Sept 2024, when scheduled plant maintenance work is set to begin.· Singapore takes delivery of another large cargo from Saudi Arabia over past week.· Cargo adds to sharp pick-up in shipments from Saudi Arabia so far in H2 2024 compared with H1 2024..· Shipments likely consist of Group I base oils, helping to supplement regional supply..· China’s base oils output edges up in Aug 2024 as Group III production extends rise..· Any extension of that trend could start to impact China’s requirements for imports of Group III base oils.· China’s base oils imports in Aug 2024 show signs of exceeding July 2024 levels, boosting country’s total supply well above year-earlier levels.· Higher supply could point to firmer demand or to build-up of inventories..· Thailand’s Group I base oils output rises to two-year high in July 2024..· Rise in output could help to cushion impact of unexpected shutdown of base oils plant in Japan during Q3 2024.· Any extension of rise in output could help to cushion impact of expected closure of major Group I unit in China in Q4 2024.· Prospect of any such extension in output is unclear in view of drop in Thailand’s Group I production in H1 2024, even when base oils margins held unusually firm.· Even so, regional plant closures and shutdowns boost importance of Thailand as increasingly key source of Group I supplies in Asia-Pacific region..· Thailand’s higher output boosts country’s total supply in July 2024, lifting surplus over demand to highest level in a year..· Rising surplus could spur pick-up in availability of Group I supplies from Thailand for export market.· Rising surplus could also incentivize Thailand’s refiners to trim base oils output..· Asia’s base oils imports from Qatar fall sharply in July 2024 from June 2024 to three-month low..· Global imports from Qatar are typically lower than usual when shipments to Asia are lower.· India’s base oils supply could get boost from signs of pick-up in shipments to the country from Saudi Arabia and US in Sept 2024..China’s Aug base oils output edges up.Thailand’s July base oils output rises.Asia base oils demand outlook: Week of 9 Sept
· Asia’s base oils prices extend rise vs feedstock/competing fuel prices, adding to incentive for refiners to maximise output.· Sustained strength of base oils margins suggests fundamentals remain balanced to tight even with any pick-up in supply.· More recent rise in base oils margins likely reflects more the weakness of crude oil prices than any further tightening of base oils fundamentals.· Any subsequent impact on demand in response to high margins could ease any supply tightness. · Asia’s base oils supply faces prospect of dipping in coming weeks as plant shutdowns in the region cut output.· Open arbitrage to Latin America could divert more shipments to that region.· Arbitrage from US to Asia stays shut, curbing volume of supplementary supplies from that market.· US prices would need significant price-adjustment for arbitrage to Asia to open.· Signs of pick-up in flows from US to India could point to some such price adjustments.· Taiwan’s base oils shipments see slowdown in early Sept 2024 after jump in shipments in H2 Aug 2024.· South Korea’s base oils exports likely to fall in Sept 2024 because of scheduled plant maintenance work.· South Korea’s base oils exports already show signs of staying lower in Aug 2024.· Ongoing plant shutdown in Japan likely to curb country’s export volumes.· Japan’s base oils imports could get a boost as buyers cover for unexpected and prolonged shutdown of base oils unit.· A rise in shipments to Japan could trim availability of supplies for other markets..· Singapore’s base oils exports stay lower than usual heading into Sept 2024 and over past four weeks..· Any extension of the slowdown would coincide with likely drop in South Korea’s exports in Sept 2024, when scheduled plant maintenance work is set to begin.· Singapore takes delivery of another large cargo from Saudi Arabia over past week.· Cargo adds to sharp pick-up in shipments from Saudi Arabia so far in H2 2024 compared with H1 2024..· Shipments likely consist of Group I base oils, helping to supplement regional supply..· China’s base oils output edges up in Aug 2024 as Group III production extends rise..· Any extension of that trend could start to impact China’s requirements for imports of Group III base oils.· China’s base oils imports in Aug 2024 show signs of exceeding July 2024 levels, boosting country’s total supply well above year-earlier levels.· Higher supply could point to firmer demand or to build-up of inventories..· Thailand’s Group I base oils output rises to two-year high in July 2024..· Rise in output could help to cushion impact of unexpected shutdown of base oils plant in Japan during Q3 2024.· Any extension of rise in output could help to cushion impact of expected closure of major Group I unit in China in Q4 2024.· Prospect of any such extension in output is unclear in view of drop in Thailand’s Group I production in H1 2024, even when base oils margins held unusually firm.· Even so, regional plant closures and shutdowns boost importance of Thailand as increasingly key source of Group I supplies in Asia-Pacific region..· Thailand’s higher output boosts country’s total supply in July 2024, lifting surplus over demand to highest level in a year..· Rising surplus could spur pick-up in availability of Group I supplies from Thailand for export market.· Rising surplus could also incentivize Thailand’s refiners to trim base oils output..· Asia’s base oils imports from Qatar fall sharply in July 2024 from June 2024 to three-month low..· Global imports from Qatar are typically lower than usual when shipments to Asia are lower.· India’s base oils supply could get boost from signs of pick-up in shipments to the country from Saudi Arabia and US in Sept 2024..China’s Aug base oils output edges up.Thailand’s July base oils output rises.Asia base oils demand outlook: Week of 9 Sept
