Asia’s base oils supply fell in April from the previous month because of plant-maintenance work in South Korea and lower output in other markets like Thailand and India.Total supply of less than 840,000 tonnes in April fell from more than 870,000 tonnes the previous month, government and industry data showed.The volume fell by 9% and for a fifth month from year-earlier levels.The drop in supply lagged the sharper fall in the region’s lube demand in April from March, triggering a rise in surplus volumes.The surplus of supply over demand rose to more than 90,000 tonnes, from less than 10,000 tonnes in March.It was still down sharply from more than 230,000 tonnes in March 2023 and in April 2023.The size of the surplus was smaller than usual for the time of year because of the drop in supply and firmer-than-expected lube consumption in April.Asia bases oils prices extended their rise relative to feedstock and competing fuel prices in April and May, reflecting the more balanced supply-demand fundamentals for the time of year.The smaller build-up of surplus base oils supplies at the start of the second quarter of the year curbed pressure on refiners to clear any supply overhang or to accept prices that they deemed to be too low.A lack of urgency to adjust prices coincided with slowing demand in key markets like China and India.The gap between FOB Asia base oils prices and imported cargo prices in those markets narrowed in response, making the arbitrage increasingly hard to work.The trend raised the prospect of a larger build-up of surplus supplies at the end of the second quarter of the year.Such an outcome highlighted the benefit for refiners to adjust prices or production in response to changes in demand even when a smaller supply surplus curbed the urgency to do so..Asia’s April lube demand rises.S Korea’s April base oils output falls.Japan’s April base oils supply stays lower
