· Asia’s base oils demand likely to get support from still-firm Chinese demand, signs of more balanced supply and easing concern about further drop in prices.· Any extension of rise in Chinese demand through end-Q1 2024 partly depends on strength of seasonal rise in domestic lube demand after lunar new year holidays..· Taiwan’s January base oils exports to China extend rebound, after pick-up in shipments in Dec 2023, amid sustained pick-up in demand into early 2024..· Rise in Taiwan's exports to China in Dec 2023 helps to replenish domestic distributors’ depleted stocks.· Rise in exports to China in Jan 2024 coincides with fall in premium of domestic prices for imported supplies over prices for domestic supplies.· Narrower premium points to recovery in supplies of imported base oils.· China’s domestic Group II prices for domestic supplies extend rise vs diesel prices even with rise in supplies.· Firm prices and higher supply point to ongoing improvement in domestic demand.· Trend mirrors typical seasonal pattern as blenders replenish stocks in preparation for rise in lube demand after lunar new year holidays.· Any extension of trend into Q2 2024 would point to more sustained pick-up in demand.· Two-month slump in Singapore’s base oils imports from China extends to mid-Jan 2024.· Slowdown in shipments points to more limited surplus supply in China, even with higher domestic output.· Disconnect adds to signs of firmer domestic demand..· South Korea’s December base oils exports to China rise to 10-month high..· Rise in shipments provide even more signs of pick-up in China's domestic demand. · Any sustained rise in China’s demand for overseas supplies could tighten availability from sources like South Korea.· Any such move would coincide with lower regional Group II prices versus feedstock/competing fuel prices, curbing incentive for regional refiners to raise output..· South Korea’s December base oils exports to Japan rise year-on-year for fourth month..· Rise in shipments coincides with closure of base oils plant in Japan in Q4 2023.· Rise in shipments points to rise in Japan’s demand for premium-grade supplies from overseas markets to cover for drop in domestic supply..· Rise in India’s base oils imports at end-2023 likely left blenders with healthy inventories, curbing urgency to secure additional volumes unless prices are deemed to be competitive.· Recent rise in cfr India Group II price premium to fob Asia prices could point to concern about tighter availability of overseas supplies in coming months.· Prices rise even amid sharp pick-up in Taiwan’s base oils exports in Jan 2024.· Rise in prices coincides with prospect of delays to shipments from sources like Saudi Arabia and US.· Any such trend would boost competition for supplies from Asia..· India’s demand for very-light grade base oils could get support at a time when domestic retail diesel prices are at a five-month high vs light-grade prices..· Any pick-up in demand could coincide with tighter supplies if regional refiners respond to lower margins and redirect very-light grade supplies back into the diesel pool..· India’s Group III 4cst base oils imports stay high in December, surge in 2023..· Trend could change this year after new production capacity in India starts operations.· Any slowdown in India’s Group III base oils imports would add to pressure on overseas refiners that already face more muted demand in US, Europe and China. .Global base oils - week of Jan 22: Price outlook - margins.Global base oils - week of Jan 22: Price outlook - arbitrage.Global base oils - week of Jan 22: Demand outlook
