· Asia’s base oils demand could face pressure as signs of more muted buying interest in outlets like India and Middle East coincide with prospect of healthy availability of supply.· China’s demand for imported Group II base oils could get a boost following recent slowdown in shipments from Taiwan especially..· Taiwan’s base oils exports show pick-up in flows to China from around mid-May 2024.· Taiwan’s base oils exports in H1 May 2024 mostly move to India and southeast Asia.· Slowdown in shipments to China in H1 May 2024 follow fall in Taiwan’s April base oils exports to China from previous month amid sustained slowdown in shipments from mid-April 2024.· Slowdown coincides with closed arbitrage to China and signs of sufficient domestic supply in the country.· China’s domestic price for imported supplies of Group II N150 extend rebound vs prices for domestic supplies in May 2024 to highest since Q2 2023..· Rebound in price premium for imported supplies suggests that supplies may have fallen too much amid ongoing underlying demand from buyers with less flexibility to switch to alternative sources..· China's domestic price premium for imported supplies rebounds vs FOB NE Asia Group II N150 prices since early-May 2024.· Rebounding premium boosts feasibility of arbitrage shipments, adding to signs supply may have fallen too low.· Slowdown in shipments could have also have impacted domestic availability of Group II heavy-grade base oils, whose premium to light-grade base oils surges in May 2024 to highest since beginning of 2023..· South Korea’s April base oils exports to China fall to seven-month low..· Slowdown adds to China’s tighter availability of imported supplies.· Slowdown suggests a large portion of South Korea’s exports to China consist of Group III base oils.· Trend adds to signs of ongoing demand from China for overseas supplies of Group III base oils.· Trend could reflect requirement for OEM-approved supplies.· Trend also suggests that some of the specifications of Group III base oils from China’s domestic refiners have yet to meet requirements that would cut ongoing need for imports of the grade..· Singapore’s base oils exports to southeast Asia start to revive over last four weeks after signs of slowdown in shipments in April 2024..· Singapore’s base oils exports to India stay unusually firm over last four weeks, extending signs of strong rise in shipments to the country in April 2024..· Exports to India rise even as country’s demand for overseas supplies could face slow down after blenders replenished inventories in April-May 2024.· India’s April imports include shipments and unusual base oils grades from infrequent sources like Turkey, Indonesia and China.· Trend highlights plentiful availability at competitive prices that could deter buyers from adding to inventories.· Signs of resistance to higher prices boost incentive for Indian buyers to work down existing stocks to cut their exposure to any downward price adjustment..· India’s demand for Group II base oils from Asia could slow after imports of the grade from the region rise in April 2024 to highest in more than three years..· Higher stocks, a pick-up in arrival of shipments from US in May 2024, and steady flows from Saudi Arabia, could curb demand for supplies from Asia.· Planned shutdown of Group II unit in India in June 2024 could support firmer demand for base oils imports in Q2 2024 in anticipation of drop in domestic supply during shutdown..· India’s April imports of Group II heavy grades rise to highest in more than three years, while imports of Group III 8cSt base oils fall..· Group II imports rise and Group III imports fall even as Group II prices rise close to or to a premium to Group III 8cSt prices.· The price dynamic previously typically triggered a pick-up in demand for Group III 8cSt base oils in place of Group II heavy grades..Global base oils demand outlook: Week of 13 May.Asia base oils demand outlook: Week of 13 May
