· Asia’s base oils demand sees ongoing signs of muted requirements from China, more cautious demand from India.· Gradual rise in region’s FOB NE Asia Group II cargo prices outpaces domestic/CFR prices in both China and India.· Lagging prices in China and India suggest prices in those markets need to rise to attract sufficient supply to meet demand, or FOB NE Asia prices need to fall because more muted demand needs less supply. .· Asia’s lube demand likely to improve over coming months after bottoming out in April 2024..· Steadier demand and expectations of healthy availability of supply give blenders the leverage to procure on a need-to basis.· Strategy is less feasible for Group I base oils, whose availability remains tight.· Steadier regional lube demand would coincide with prospect of lighter round of scheduled plant maintenance in the region work over coming months.· Trend could increase the importance of arbitrage opportunities to clear any rise in surplus volumes..· China’s domestic Group II light-grade premium to Shandong diesel prices holds steady at levels that point to refiners' wariness at strength of demand.· China’s domestic Group II base oils premium to FOB NE Asia prices extends fall to lowest in more than five months, making the arbitrage even harder to work.· Less feasible arbitrage suggests any Group II shipments to China consist mostly of term volumes.· Less feasible arbitrage incentivizes term suppliers to minimize volumes and redirect supplies to more profitable outlets.· China’s demand for overseas supplies shows signs of holding steady at lower levels for Group II base oils.· Singapore’s base oils exports to China hold steady at lower levels over last four weeks, reflecting that dynamic.· Taiwan’s base oils exports to China slow sharply in H2 April 2024, adding to signs of steady flows at lower levels.· China’s domestic price premium of Group II imported base oils over domestic base oils rises to highest since Feb 2024.· Higher premium could point to tighter-than-expected imported supplies that lag demand.· Higher premium boosts attraction for domestic buyers to procure more supplies from domestic producers..· China’s March base oil imports stay more muted from markets producing Group II base oils, such as Taiwan and Singapore.· Muted imports suggest China’s domestic production is sufficient to cover growing share of the country’s Group II base oils requirements..· China’s rangebound domestic Group II base oil premium to diesel prices this year suggests domestic demand is barely sufficient to absorb even the country’s domestic supply.· China’s March base oils imports stay muted from markets producing Group I base oils, such as Thailand and Japan.· Muted imports coincide with increasingly firm domestic Group I base oils prices in China.· Price trend points to stronger demand for overseas Group I base oils supplies.· China’s Group I bright stock premium to FOB Asia prices edges down from two-year highs in late-March 2024, still close to two-year high.· China’s muted Group I imports in March 2024 suggest that overseas supply is insufficient to meet its demand.· Trend reflects tighter structural supply of Group I base oils in Asia.· China’s domestic Group I base oils supply set to improve in coming weeks following completion of Group I plant maintenance work in early May 2024.· China’s base oils imports from Group III producers like Mideast Gulf and South Korea surge in March 2024.· Surge in shipments suggests China remains short of Group III base oils even after wave of new plant start-ups in recent years.· Tighter supply, and plentiful availability of Group II base oils, could reflect domestic refineries’ ability to meet Group II specifications more easily than Group III specifications..· Firm CFR India N70 premium to Asia gasoil coincides with India’s lower retail diesel premium to imported N70 cargo prices.· Trend boosts incentive to supply more light-grade base oils, cuts attraction of procuring more base oils.· Premium of CFR India Group II base oils prices over FOB NE Asia prices extends fall, with N150 premium dipping to lowest since Dec 2023.· Narrowing premium cuts attraction of moving more supplies to India, pointing to more muted demand.· Narrowing premium coincides with signs of sharper slowdown in supplies moving from Saudi Arabia to India in April 2024.· Any slowdown in India's demand would follow round of stock-replenishment in April 2024.· Replenished stocks and prospect of seasonal slowdown in demand during monsoon season curb urgency to lock in more supplies unless prices are competitive.· FOB Asia Group III 8cSt premium to FOB NE Asia Group II N500 falls to narrowest since mid-2022.· Trend incentivizes buyers in markets like India to procure more Group III 8cSt base oils instead of Group II heavy grades..Asia base oils demand outlook: Week of 22 April.Global base oils demand outlook: Week of 22 April
· Asia’s base oils demand sees ongoing signs of muted requirements from China, more cautious demand from India.· Gradual rise in region’s FOB NE Asia Group II cargo prices outpaces domestic/CFR prices in both China and India.· Lagging prices in China and India suggest prices in those markets need to rise to attract sufficient supply to meet demand, or FOB NE Asia prices need to fall because more muted demand needs less supply. .· Asia’s lube demand likely to improve over coming months after bottoming out in April 2024..· Steadier demand and expectations of healthy availability of supply give blenders the leverage to procure on a need-to basis.· Strategy is less feasible for Group I base oils, whose availability remains tight.· Steadier regional lube demand would coincide with prospect of lighter round of scheduled plant maintenance in the region work over coming months.· Trend could increase the importance of arbitrage opportunities to clear any rise in surplus volumes..· China’s domestic Group II light-grade premium to Shandong diesel prices holds steady at levels that point to refiners' wariness at strength of demand.· China’s domestic Group II base oils premium to FOB NE Asia prices extends fall to lowest in more than five months, making the arbitrage even harder to work.· Less feasible arbitrage suggests any Group II shipments to China consist mostly of term volumes.· Less feasible arbitrage incentivizes term suppliers to minimize volumes and redirect supplies to more profitable outlets.· China’s demand for overseas supplies shows signs of holding steady at lower levels for Group II base oils.· Singapore’s base oils exports to China hold steady at lower levels over last four weeks, reflecting that dynamic.· Taiwan’s base oils exports to China slow sharply in H2 April 2024, adding to signs of steady flows at lower levels.· China’s domestic price premium of Group II imported base oils over domestic base oils rises to highest since Feb 2024.· Higher premium could point to tighter-than-expected imported supplies that lag demand.· Higher premium boosts attraction for domestic buyers to procure more supplies from domestic producers..· China’s March base oil imports stay more muted from markets producing Group II base oils, such as Taiwan and Singapore.· Muted imports suggest China’s domestic production is sufficient to cover growing share of the country’s Group II base oils requirements..· China’s rangebound domestic Group II base oil premium to diesel prices this year suggests domestic demand is barely sufficient to absorb even the country’s domestic supply.· China’s March base oils imports stay muted from markets producing Group I base oils, such as Thailand and Japan.· Muted imports coincide with increasingly firm domestic Group I base oils prices in China.· Price trend points to stronger demand for overseas Group I base oils supplies.· China’s Group I bright stock premium to FOB Asia prices edges down from two-year highs in late-March 2024, still close to two-year high.· China’s muted Group I imports in March 2024 suggest that overseas supply is insufficient to meet its demand.· Trend reflects tighter structural supply of Group I base oils in Asia.· China’s domestic Group I base oils supply set to improve in coming weeks following completion of Group I plant maintenance work in early May 2024.· China’s base oils imports from Group III producers like Mideast Gulf and South Korea surge in March 2024.· Surge in shipments suggests China remains short of Group III base oils even after wave of new plant start-ups in recent years.· Tighter supply, and plentiful availability of Group II base oils, could reflect domestic refineries’ ability to meet Group II specifications more easily than Group III specifications..· Firm CFR India N70 premium to Asia gasoil coincides with India’s lower retail diesel premium to imported N70 cargo prices.· Trend boosts incentive to supply more light-grade base oils, cuts attraction of procuring more base oils.· Premium of CFR India Group II base oils prices over FOB NE Asia prices extends fall, with N150 premium dipping to lowest since Dec 2023.· Narrowing premium cuts attraction of moving more supplies to India, pointing to more muted demand.· Narrowing premium coincides with signs of sharper slowdown in supplies moving from Saudi Arabia to India in April 2024.· Any slowdown in India's demand would follow round of stock-replenishment in April 2024.· Replenished stocks and prospect of seasonal slowdown in demand during monsoon season curb urgency to lock in more supplies unless prices are competitive.· FOB Asia Group III 8cSt premium to FOB NE Asia Group II N500 falls to narrowest since mid-2022.· Trend incentivizes buyers in markets like India to procure more Group III 8cSt base oils instead of Group II heavy grades..Asia base oils demand outlook: Week of 22 April.Global base oils demand outlook: Week of 22 April
