· Asia’s base oils demand could face pressure from signs of balanced supply, limited stock-building, and typical slowdown in lube demand at start of second quarter of the year.· Typical slowdown in lube demand at start of second quarter could incentivize blenders to maintain lower stocks.· Closed arbitrage to more distant markets sustains prospect of sufficient regional supply, curbing need to procure larger volumes..· China’s demand for regional base oils shipments could hold steadier, even if still at lower levels, if the market avoids a repeat of the surge in imports that it faced this time last year.· Signs of steady flows from Singapore and lower volumes from Taiwan in H1 March 2024 raise the prospect of avoiding a repeat of last-year’s supply-build.· China’s domestic Group II price premium to fob Asia cargo prices narrows further, curbing prospect of any sharp pick-up in shipments to China over the coming weeks..· Total exports from South Korea, Singapore and Taiwan to China in first two months of 2024 fall 15pc from year-earlier levels..· Drop in shipments points to signs of more balanced supplies in China.· Steady demand for overseas shipments at lower levels suggests domestic buyers prefer to maintain low stocks and replenish inventories more frequently.· Signs of pick-up in China’s base oils exports point to sufficient supplies to meet domestic demand.· China’s Group II domestic price premium to Shandong diesel prices extends fall, adding to signs of sufficient supply and relatively muted demand..· Taiwan’s February base oils exports slump from previous month following unplanned plant shutdown in late-Jan 2024..· Fall in total exports and in shipments to China has limited impact on China’s domestic prices.· China’s domestic price for imported Group II supplies rises relative to prices for domestic supplies in Feb 2024, before easing in March 2024..· Muted size of price rise suggests China’s supply remained sufficient even with lower-than-expected supplies from Taiwan.· Trend suggests China’s buyers prefer to maintain lower stocks even ahead of seasonal pick-up in lube demand.· Trend suggests China’s buyers expect rise in lube demand to be relatively weak, with domestic supplies sufficient to cover requirements. .· India’s Group II prices maintain unusually steep premium to US export prices, maintaining attraction of moving arbitrage shipments to India.· Open arbitrage follows fall in India’s February base oils imports, excluding very-light grade base oils, to four-month low..· Slowdown in shipments ahead of peak-demand season in month of March could spur pick-up in buying interest to replenish stocks.· India’s demand for very-light grade base oils likely to hold firm as CFR India N70 price discount to domestic retail diesel prices stays relatively wide.· Wide N70 price discount to diesel prices in early 2024 coincides with pick-up in light-grade imports in Feb 2024..· Asia’s January lube consumption rises more than expected on strong demand in northeast and southeast Asia..· Demand rises despite weaker consumption in India and muted Chinese demand for overseas base oils supplies.· Trend highlights size and diversity of different markets throughout Asia region and attraction for refiners to target those markets.· Asia’s rising lube demand in early 2024 cushions impact of rise in base oils supply, limiting regional supply-build.· Prospect of slowdown in lube demand at start of Q2 2024 could increase impact of any rise in base oils supply.· Start of fasting month of Ramadan could curb demand in markets like Indonesia even earlier..Global base oils margins outlook: Week of March 18.Global base oils arb outlook: Week of March 18.Global base oils demand outlook: Week of March 18
· Asia’s base oils demand could face pressure from signs of balanced supply, limited stock-building, and typical slowdown in lube demand at start of second quarter of the year.· Typical slowdown in lube demand at start of second quarter could incentivize blenders to maintain lower stocks.· Closed arbitrage to more distant markets sustains prospect of sufficient regional supply, curbing need to procure larger volumes..· China’s demand for regional base oils shipments could hold steadier, even if still at lower levels, if the market avoids a repeat of the surge in imports that it faced this time last year.· Signs of steady flows from Singapore and lower volumes from Taiwan in H1 March 2024 raise the prospect of avoiding a repeat of last-year’s supply-build.· China’s domestic Group II price premium to fob Asia cargo prices narrows further, curbing prospect of any sharp pick-up in shipments to China over the coming weeks..· Total exports from South Korea, Singapore and Taiwan to China in first two months of 2024 fall 15pc from year-earlier levels..· Drop in shipments points to signs of more balanced supplies in China.· Steady demand for overseas shipments at lower levels suggests domestic buyers prefer to maintain low stocks and replenish inventories more frequently.· Signs of pick-up in China’s base oils exports point to sufficient supplies to meet domestic demand.· China’s Group II domestic price premium to Shandong diesel prices extends fall, adding to signs of sufficient supply and relatively muted demand..· Taiwan’s February base oils exports slump from previous month following unplanned plant shutdown in late-Jan 2024..· Fall in total exports and in shipments to China has limited impact on China’s domestic prices.· China’s domestic price for imported Group II supplies rises relative to prices for domestic supplies in Feb 2024, before easing in March 2024..· Muted size of price rise suggests China’s supply remained sufficient even with lower-than-expected supplies from Taiwan.· Trend suggests China’s buyers prefer to maintain lower stocks even ahead of seasonal pick-up in lube demand.· Trend suggests China’s buyers expect rise in lube demand to be relatively weak, with domestic supplies sufficient to cover requirements. .· India’s Group II prices maintain unusually steep premium to US export prices, maintaining attraction of moving arbitrage shipments to India.· Open arbitrage follows fall in India’s February base oils imports, excluding very-light grade base oils, to four-month low..· Slowdown in shipments ahead of peak-demand season in month of March could spur pick-up in buying interest to replenish stocks.· India’s demand for very-light grade base oils likely to hold firm as CFR India N70 price discount to domestic retail diesel prices stays relatively wide.· Wide N70 price discount to diesel prices in early 2024 coincides with pick-up in light-grade imports in Feb 2024..· Asia’s January lube consumption rises more than expected on strong demand in northeast and southeast Asia..· Demand rises despite weaker consumption in India and muted Chinese demand for overseas base oils supplies.· Trend highlights size and diversity of different markets throughout Asia region and attraction for refiners to target those markets.· Asia’s rising lube demand in early 2024 cushions impact of rise in base oils supply, limiting regional supply-build.· Prospect of slowdown in lube demand at start of Q2 2024 could increase impact of any rise in base oils supply.· Start of fasting month of Ramadan could curb demand in markets like Indonesia even earlier..Global base oils margins outlook: Week of March 18.Global base oils arb outlook: Week of March 18.Global base oils demand outlook: Week of March 18
