Asia's exports to SE Asia rise, while region's demand falls
Disconnect triggers rise in surplus to highest in more than a year
Surplus supply could curb demand as blenders focus on trimming stocks
Asia’s base oils exports to southeast Asia surged ahead of regional demand in October by the widest margin in more than a year, creating a sizeable surplus that could weigh on import requirements in the coming months.
Expectations of healthy supply availability and downward pressure on base oils prices during the winter added to blenders’ incentive to keep stocks lean.
Those moves risk compounding any further slowdown in regional demand and increasing pressure on Asian refiners to redirect surplus volumes to other markets.
Asia exported more than 200,000 tonnes of base oils to southeast Asia in October, up 6% year-on-year and marking the fourth increase in five months, government data showed.
The rise in shipments contrasted with a fall in Asia’s overall base oils exports, underscoring southeast Asia’s growing importance as a critical outlet for regional supply.
That importance is set to rise further as new production capacity starts up in India, curbing the country’s need for base oils imports and intensifying competition for markets like southeast Asia.
The region’s lube demand fell by 8% in October to a seven-month low, widening the disconnect between supply and consumption.
The exports surplus over demand duly rebounded to more than 30,000 tonnes, the highest level since July 2024. That surplus nearly disappeared by August 2024 before flipping to a deficit in September as buyers drew down stocks.
Any repeat of that pattern this time could again curb regional intake of overseas shipments.
