· Global base oils supply rises to one-year high in March and by more than 520,000t from February..· Global base oils supply was even higher in March 2022, before falling sharply over following months, while base oils demand rose even as lube demand slipped.· Global base oils supply shows signs of holding firmer in Q2 2023, while demand continued to fall.· Global base oils supply surplus over lube demand widens in March even with seasonal rise in lube consumption..· Surge in surplus supply in Q1 2023 vs Q1 2022 leaves wave of supplies to clear through arbitrage shipments throughout Q2 2023.· Surplus supply cushions impact of plant maintenance work in all the key markets during Q2 2023.· Surplus supply could linger in Q2 2023 and especially Q3 2023 following completion of plant maintenance and as firm base oils values vs diesel incentivize refiners to maintain higher run-rates.· China’s Shandong diesel premium to crude oil extends fall to lowest since start of year.· Lower diesel premium to crude and higher base oils premium to crude incentivizes Chinese refiners to boost base oils output.· India’s retail diesel premium to crude oil stays unusually wide, incentivizing refiners to maintain high run-rates.· Asia-Pacific base oils plant maintenance mostly set to draw to a close in coming weeks.· End of plant maintenance set to coincide with seasonal slowdown in regional demand in Q3 2023, in addition to muted Chinese demand.· China’s May base oils imports fall to four-month low, highlighting country’s weaker-than-expected demand for regional supplies..· Trend suggests China’s domestic supply is increasingly sufficient to cover country’s requirements.· Singapore’s May base oils exports hold firm even with plant maintenance work in Q2 2023..· Steady exports keep regional market well-supplied through Q2 2023, curbing impact of plant maintenance work in other countries.· India’s May Group II light and especially heavy-grade imports fall mostly because of slump in shipments from Singapore..· Muted price support from lower supplies in India reflects ready availability from other sources like US, as well as plentiful supplies from domestic refiners.· India faces prospect of pick-up in supplies from Singapore in Q3 2023 as well as arrival of more shipments from US.· South Korea’s May exports to India/UAE fall to three-year low, reflecting difficulty of moving surplus supplies to outlets being targeted by refiners in other regions..· Fall in exports to India has scant impact on prices or demand in India as buyers line up supplies from other sources.· Trend likely to continue at least through early Q3 2023.· Singapore’s rising base oils exports to southeast Asia in June partially balance out its slowdown in shipments to China and India.· Southeast Asia’s ability to absorb more base oils supplies over the coming months may be more constrained than last year amid weaker demand..Asia base oils – week of June 26: Demand outlook.Contact us for more information about the data for these stories
· Global base oils supply rises to one-year high in March and by more than 520,000t from February..· Global base oils supply was even higher in March 2022, before falling sharply over following months, while base oils demand rose even as lube demand slipped.· Global base oils supply shows signs of holding firmer in Q2 2023, while demand continued to fall.· Global base oils supply surplus over lube demand widens in March even with seasonal rise in lube consumption..· Surge in surplus supply in Q1 2023 vs Q1 2022 leaves wave of supplies to clear through arbitrage shipments throughout Q2 2023.· Surplus supply cushions impact of plant maintenance work in all the key markets during Q2 2023.· Surplus supply could linger in Q2 2023 and especially Q3 2023 following completion of plant maintenance and as firm base oils values vs diesel incentivize refiners to maintain higher run-rates.· China’s Shandong diesel premium to crude oil extends fall to lowest since start of year.· Lower diesel premium to crude and higher base oils premium to crude incentivizes Chinese refiners to boost base oils output.· India’s retail diesel premium to crude oil stays unusually wide, incentivizing refiners to maintain high run-rates.· Asia-Pacific base oils plant maintenance mostly set to draw to a close in coming weeks.· End of plant maintenance set to coincide with seasonal slowdown in regional demand in Q3 2023, in addition to muted Chinese demand.· China’s May base oils imports fall to four-month low, highlighting country’s weaker-than-expected demand for regional supplies..· Trend suggests China’s domestic supply is increasingly sufficient to cover country’s requirements.· Singapore’s May base oils exports hold firm even with plant maintenance work in Q2 2023..· Steady exports keep regional market well-supplied through Q2 2023, curbing impact of plant maintenance work in other countries.· India’s May Group II light and especially heavy-grade imports fall mostly because of slump in shipments from Singapore..· Muted price support from lower supplies in India reflects ready availability from other sources like US, as well as plentiful supplies from domestic refiners.· India faces prospect of pick-up in supplies from Singapore in Q3 2023 as well as arrival of more shipments from US.· South Korea’s May exports to India/UAE fall to three-year low, reflecting difficulty of moving surplus supplies to outlets being targeted by refiners in other regions..· Fall in exports to India has scant impact on prices or demand in India as buyers line up supplies from other sources.· Trend likely to continue at least through early Q3 2023.· Singapore’s rising base oils exports to southeast Asia in June partially balance out its slowdown in shipments to China and India.· Southeast Asia’s ability to absorb more base oils supplies over the coming months may be more constrained than last year amid weaker demand..Asia base oils – week of June 26: Demand outlook.Contact us for more information about the data for these stories
