Asia base oils - week of Apr 17: Demand outlook

·        More central banks in Asia-Pacific pause on additional interest-rate increases.

·        Asia-Pacific base oils consumption holds firm – but demand for additional supplies could ease after buyers replenished stocks during Q1 2023.

·        China’s base oils demand recovery remains mixed, with little sign of repeat of post-lockdown surge in demand in 1H 2020.

·        China’s March car sales rise for second month, led by firm demand for SUVs. Electric vehicle sales rise at slower pace than in 2022 – share of auto market steadies.

·        Chinese demand for regional base oils supplies could flatline or dip once domestic plant maintenance is completed.

·        Ongoing slide in Singapore’s base oils shipments to China over past month point to slowdown in Chinese demand or rise in country’s domestic supply.

·        Chinese demand for supplies from other regional producers turns more mixed.

·        India’s March lube demand rises from February, falls sharply from year-earlier levels.

·        India’s lube demand typically falls sharply in the month of April from the previous month.

·        Slowdown partly reflects artificial rise in March demand when blenders seek to meet annual sales targets before financial year-end.

·        Strong March consumption leaves blenders with lower inventories and need to replenish stocks.

·        India’s March base oils supply lags demand, adding to need to replenish stocks.

·        Weaker April demand curbs urgency to replenish stocks unless buyers anticipate prices set to trend sharply higher or buyers receive offers at unusually attractive prices.

·        Indian buyers cover base oils requirements with ease so far this year even without typical wave of arbitrage shipments from US in Q1 2023.

·        India’s demand for very-light grade base oils could get support from buyers seeking to lock in supplies before likely rise in prices.

·        Southeast Asian base oils imports rise to five-month high in February – healthy availability and acceptable prices attract demand.

·        Buyers’ replenished stocks give them flexibility over volume and timing of procurement of additional supplies.

·        Philippines’ demand for imported lubricants extends rise, contrasting with lower demand for base oils.

·        Firm demand adds to signs of healthy lube consumption throughout southeast Asia.