· Asia’s base oils demand likely to be more mixed, with balanced supplies and higher prices supporting steady buying interest.· Demand in China and India could start to ease amid signs of sufficient supplies, typical slowdown in second quarter of the year..· China’s base oils demand showed signs of holding sufficiently strong to absorb country’s rising base oils supply in recent months.· Ongoing slowdown in shipments from China to Singapore reflects more limited surplus or domestic prices that make exports less attractive.· But recent signs of price weakness suggest China’s base oils demand could be struggling to absorb existing or additional supplies.· China’s domestic Group II light-grade premium to Shandong diesel prices extends slide even with seasonal pick-up in demand, domestic plant maintenance work and less feasible arbitrage from Asia.· China’s base oils demand for overseas supplies shows signs of staying muted except for bright stock.· China’s demand for overseas supplies shows signs of staying muted even with prospect of drop in domestic supply because of scheduled plant maintenance work.· Asia’s Group I bright stock prices often fall relative to other grades and other regions during the second quarter of the year as supply-demand fundamentals ease.· The trend could be different this year with supply likely to remain tighter than usual.· Asia’s rising Group II N500 price cuts its discount to Asia’s Group III 8cst base oils prices to narrowest level in almost four months.· Narrowing discount could boost incentive for blenders to procure more Group III 8cst base oils..· Singapore’s base oils exports to southeast Asia hold firm over last four weeks; shipments dip to India and China..· Focus of shipments on southeast Asia coincides with signs of steady demand in the region, still-cautious buying in China, and plentiful supplies in India..· Thailand’s January lube consumption rises for sixth month, pointing to ongoing demand strength in southeast Asia..· Thailand’s rising lube demand coincides with fall in country’s base oils output to fourteen-month low.· Trend compounds fall in base oils supplies available for export..· Drop in exports coincides with signs of firmer demand in China for Group I bright stock.· Thailand’s lube demand likely to rise even more in month of March, limiting recovery in base oils supplies for export even after completion of recent plant maintenance work..· India’s Group II light-grade base oil premium to US export prices widens further even after steady build-up of surplus supplies in late 2023 and early this year.· Widening premium keeps arbitrage open, sustaining buying interest.· Widening premium coincides with signs of slowdown in shipments from Saudi Arabia to India, boosting attraction of alternative supplies from sources like US.· Indian buyers’ base oils stocks face prospect of staying higher for longer in face of slowdown in country’s lube demand in Feb 2024 for a second month..· More muted demand and signs of relatively rangebound prices for most base oils grades could prompt buyers to hold off adding to inventories unless prices are at competitive levels.· Prospect of slowdown in India’s lube demand in Q2 2024 could add to reluctance to add to stocks.
· Asia’s base oils demand likely to be more mixed, with balanced supplies and higher prices supporting steady buying interest.· Demand in China and India could start to ease amid signs of sufficient supplies, typical slowdown in second quarter of the year..· China’s base oils demand showed signs of holding sufficiently strong to absorb country’s rising base oils supply in recent months.· Ongoing slowdown in shipments from China to Singapore reflects more limited surplus or domestic prices that make exports less attractive.· But recent signs of price weakness suggest China’s base oils demand could be struggling to absorb existing or additional supplies.· China’s domestic Group II light-grade premium to Shandong diesel prices extends slide even with seasonal pick-up in demand, domestic plant maintenance work and less feasible arbitrage from Asia.· China’s base oils demand for overseas supplies shows signs of staying muted except for bright stock.· China’s demand for overseas supplies shows signs of staying muted even with prospect of drop in domestic supply because of scheduled plant maintenance work.· Asia’s Group I bright stock prices often fall relative to other grades and other regions during the second quarter of the year as supply-demand fundamentals ease.· The trend could be different this year with supply likely to remain tighter than usual.· Asia’s rising Group II N500 price cuts its discount to Asia’s Group III 8cst base oils prices to narrowest level in almost four months.· Narrowing discount could boost incentive for blenders to procure more Group III 8cst base oils..· Singapore’s base oils exports to southeast Asia hold firm over last four weeks; shipments dip to India and China..· Focus of shipments on southeast Asia coincides with signs of steady demand in the region, still-cautious buying in China, and plentiful supplies in India..· Thailand’s January lube consumption rises for sixth month, pointing to ongoing demand strength in southeast Asia..· Thailand’s rising lube demand coincides with fall in country’s base oils output to fourteen-month low.· Trend compounds fall in base oils supplies available for export..· Drop in exports coincides with signs of firmer demand in China for Group I bright stock.· Thailand’s lube demand likely to rise even more in month of March, limiting recovery in base oils supplies for export even after completion of recent plant maintenance work..· India’s Group II light-grade base oil premium to US export prices widens further even after steady build-up of surplus supplies in late 2023 and early this year.· Widening premium keeps arbitrage open, sustaining buying interest.· Widening premium coincides with signs of slowdown in shipments from Saudi Arabia to India, boosting attraction of alternative supplies from sources like US.· Indian buyers’ base oils stocks face prospect of staying higher for longer in face of slowdown in country’s lube demand in Feb 2024 for a second month..· More muted demand and signs of relatively rangebound prices for most base oils grades could prompt buyers to hold off adding to inventories unless prices are at competitive levels.· Prospect of slowdown in India’s lube demand in Q2 2024 could add to reluctance to add to stocks.
