· Asia’s base oils demand gets support from signs of tighter availability of Group I base oils especially.
· China’s base oils demand faces slowdown over coming weeks during lunar new year holidays.
· Seasonal rise in lube demand typically gathers pace after lunar new year holidays.
· Strength of rise in demand likely to determine whether China will continue to absorb larger-than-usual volumes from regional market.
· Weaker-than-expected lube consumption could trigger steeper slowdown in base oils demand as domestic blenders work down inventories.
· China’s domestic Group II base oils prices hold firm vs diesel, edge down vs fob Asia prices.
· Trend could point to firm demand and signs of sufficient domestic supply.
· China’s domestic supply shows signs of extending rise in Jan 2024 after already rising to 21-month high in Dec 2023.
· Demand shows signs of holding firm in southeast Asia.
· Vietnam’s December base oils imports hold firm on rebound in supplies from Singapore.
· Vietnam’s rising base oils imports contrast with weak demand growth in China and prospect of lower import requirements from India in coming months.
· Trend highlights importance of markets like Vietnam for suppliers like Singapore and South Korea.
· Surge in Vietnam’s imports from South Korea in 2023 reflect rising value/importance of the southeast Asian market.
· Imports from South Korea almost match shipment volume from Singapore in 2023 amid rising competition to supply Vietnam market.
· Singapore’s base oils exports to southeast Asia recover to more typical levels over past four weeks.
· Recovery in shipments coincides with firmer volumes bound for China, contrasts with lower volumes to India.
· India’s high base oils stocks could curb demand for some products unless prices for additional supplies are deemed to be competitive.
· Volatility of crude oil prices could incentivize buyers with high stocks to trim their inventories to lock in profit and limit price exposure.
· Firmer CFR India prices for products like bright stock point to steady demand and tighter availability of those products.
· Signs of slowdown in flows of shipments from Saudi Arabia to India could boost demand for supplies from other sources.