· Asia’s base oils demand could be more mixed amid signs of relatively muted Chinese demand, steady Indian demand and prospect of seasonal slowdown in requirements in southeast Asia at start of Q2 2024.· Regional demand for heavy grades shows signs of holding firm, as gap between heavy neutrals and light-grade prices continues to widen.· Firm CFR India and domestic Chinese prices for Group I bright stock point to still-strong demand for the heavy-grade product.· Demand for Asia Group III 8cSt base oils could get a boost as its premium to Group II heavy grades falls to lowest since Q3 2022.· China’s domestic Group I prices strengthen relative to Group II prices, pointing to tighter supply-demand fundamentals for Group I base oils.· China’s domestic Group II premium to FOB Asia prices steadies below levels at start of 2024 and well below year-earlier levels, curbing attraction of arbitrage flows to the country.· China’s base oils demand for regional supplies turns more mixed, with signs of pick-up in flows from South Korea in March 2024, steady flows from Singapore, and lower-than-usual volumes from Taiwan.· Signs of pick-up in flows from South Korea to China could reflect moves to cover for lower-than-usual volume of shipments from Taiwan in month to mid-March 2024.· Signs of pick-up in flows from South Korea coincides with some plant maintenance work in China..· Singapore’s base oils exports to India and southeast Asia rise over the past week and past four weeks, while shipments to China hold steady..· Trend reflects signs of firm demand in southeast Asia where lube consumption has been trending higher.· Trend reflects signs of firm demand in India for alternative supplies, especially for volumes with a faster delivery time than cargoes from the US..· South Korea’s February base oils exports to southeast Asia hold firm in Feb 2024..· Steady exports point to firm demand in the region.· Steady exports in Feb 2024 exceed shipment volumes to China and India.· Large share of total exports highlights growing importance of southeast Asia as outlet for South Korea’s supplies..· India’s demand for Group II light and heavy-grade base oils could hold firmer following slide in country’s Group II imports in Feb 2024..· Prospect of more prolonged slowdown in shipments from Saudi Arabia boosts interest in Group II supplies from the US, although the journey time for these shipments is longer.· Premium of CFR India Group II prices over US prices stays unusually wide, pointing to ongoing interest in securing more arbitrage supplies.· Tighter Group II supply and higher Group II heavy-grade prices could boost Indian buyers’ interest in supplies of Group III 8cSt base oils..· Pakistan’s January base oils imports rise year-on-year for fourth time in five months, with shipments from South Korea and Singapore accounting for almost all the supplies..· Trend highlights importance of outlets like Pakistan for regional suppliers with large export volumes.· China’s waning demand for overseas supplies, and prospect of slowdown in India’s demand for imports, adds to importance of outlets like Pakistan.· Group II heavy grades continue to account for unusually large share of Pakistan’s base oils imports – adding to its attraction for refiners with large volumes of those supplies.
