· Asia’s base oils demand could start to ease as the prospect of improving availability and a seasonal dip in lube consumption curb blenders' urgency to buy.· Any signs of increasing surplus supply could curb room for additional rise in prices, further slowing buyers’ urgency to lock in supplies.· Asia’s Group II heavy-grade differential to Group I SN500 extends strong rebound since early this year.· Sustained rebound could reflect structural changes as regional market adapts to fall in Group I supply, triggering rise in Group II base oils consumption..· Asia’s lube demand likely to fall in Q2 2024 from Q1 2024 amid seasonal slowdown in month of April..· Slowdown in lube demand raises prospect of rise in surplus base oils supplies if regional output holds steady or rises.· Such a scenario would repeat the same trend in April 2022 and April 2023.· Such a scenario increases incentive/need for refiners to adjust output or to adjust prices to make arbitrage workable to other regions..· China’s domestic base oils demand shows signs of staying relatively muted, with sufficient supplies to meet demand for most base oils grades.· China’s domestic Group II N150 premium to diesel prices improves to one-month high but remains well below year-earlier levels.· Rangebound premium points to sufficient supply to meet demand.· Arbitrage to move Group II supplies from Asia to China stays harder to work, especially compared with same time a year earlier.· Brightstock remains an outlier.· Domestic China brightstock premium to FOB Asia and CFR India prices widens further, adding to attraction of moving more arbitrage shipments to China.· Singapore’s base oils exports to China pause last week, leaving shipments in March 2024 down sharply from March 2023..· Slowdown in shipments coincides with plant maintenance in China, suggesting domestic blenders prefer to maintain low inventories.· Singapore’s base oils exports to southeast Asia account for almost all the island-state’s shipments last week.· Firm flows trigger rebound in Singapore’s exports to southeast Asia in March 2024 after slowdown in Feb 2024.· Trend points to ongoing focus on tapping steadier demand requirements in southeast Asia market..· India’s demand could stay firmer for longer as slowdown in imports from Saudi Arabia curbs flows from one of India’s logistically closest sources.· Drop in imports from Saudi Arabia slows recovery in India’s base oils supply following sharp fall in supply surplus in Feb 2024.· Demand for overseas supplies likely to get further support until country’s domestic base oils production reverts to more typical levels.· Firmer demand shows signs of attracting more supplies from South Korea.· Trend raises prospect of pick-up in shipments from South Korea and US reaching India in April 2024..· CFR India Group II N150 premium to FOB NE Asia prices extends sharp slide for third week to lowest in a month.· Any extension of that trend would make arbitrage to India more complicated and could point to change in India’s supply-demand fundamentals.· India’s retail diesel premium to CFR India N70 prices falls to four-month low in March 2024. .· Fall in premium gathers pace after India’s refiners cut retail diesel prices last month for first time since May 2022.· Lower premium often coincides with drop in demand for very-light grade base oils..Global base oils demand outlook - week of April 1.Global base oils margins outlook - week of April 1.Global base oils arb outlook: Week of April 1
· Asia’s base oils demand could start to ease as the prospect of improving availability and a seasonal dip in lube consumption curb blenders' urgency to buy.· Any signs of increasing surplus supply could curb room for additional rise in prices, further slowing buyers’ urgency to lock in supplies.· Asia’s Group II heavy-grade differential to Group I SN500 extends strong rebound since early this year.· Sustained rebound could reflect structural changes as regional market adapts to fall in Group I supply, triggering rise in Group II base oils consumption..· Asia’s lube demand likely to fall in Q2 2024 from Q1 2024 amid seasonal slowdown in month of April..· Slowdown in lube demand raises prospect of rise in surplus base oils supplies if regional output holds steady or rises.· Such a scenario would repeat the same trend in April 2022 and April 2023.· Such a scenario increases incentive/need for refiners to adjust output or to adjust prices to make arbitrage workable to other regions..· China’s domestic base oils demand shows signs of staying relatively muted, with sufficient supplies to meet demand for most base oils grades.· China’s domestic Group II N150 premium to diesel prices improves to one-month high but remains well below year-earlier levels.· Rangebound premium points to sufficient supply to meet demand.· Arbitrage to move Group II supplies from Asia to China stays harder to work, especially compared with same time a year earlier.· Brightstock remains an outlier.· Domestic China brightstock premium to FOB Asia and CFR India prices widens further, adding to attraction of moving more arbitrage shipments to China.· Singapore’s base oils exports to China pause last week, leaving shipments in March 2024 down sharply from March 2023..· Slowdown in shipments coincides with plant maintenance in China, suggesting domestic blenders prefer to maintain low inventories.· Singapore’s base oils exports to southeast Asia account for almost all the island-state’s shipments last week.· Firm flows trigger rebound in Singapore’s exports to southeast Asia in March 2024 after slowdown in Feb 2024.· Trend points to ongoing focus on tapping steadier demand requirements in southeast Asia market..· India’s demand could stay firmer for longer as slowdown in imports from Saudi Arabia curbs flows from one of India’s logistically closest sources.· Drop in imports from Saudi Arabia slows recovery in India’s base oils supply following sharp fall in supply surplus in Feb 2024.· Demand for overseas supplies likely to get further support until country’s domestic base oils production reverts to more typical levels.· Firmer demand shows signs of attracting more supplies from South Korea.· Trend raises prospect of pick-up in shipments from South Korea and US reaching India in April 2024..· CFR India Group II N150 premium to FOB NE Asia prices extends sharp slide for third week to lowest in a month.· Any extension of that trend would make arbitrage to India more complicated and could point to change in India’s supply-demand fundamentals.· India’s retail diesel premium to CFR India N70 prices falls to four-month low in March 2024. .· Fall in premium gathers pace after India’s refiners cut retail diesel prices last month for first time since May 2022.· Lower premium often coincides with drop in demand for very-light grade base oils..Global base oils demand outlook - week of April 1.Global base oils margins outlook - week of April 1.Global base oils arb outlook: Week of April 1
