· Asia heavy-grade base oils price-premium to Singapore gasoil holds at elevated levels even as it slips from recent highs.· High heavy-grade margins point to firm supply-demand fundamentals, incentivize refiners to maintain or raise output of the grades.· Besides firm margins, outperformance of regional Group I SN 500 price relative to other grades and other regions points to even stronger fundamentals for that product..· Asia light-grade price-premium to Singapore gasoil falls further, to levels that could incentivize refiners to produce more motor fuels instead.· Any such run-cuts could curb size of likely rise in regional supply in coming months following completion of most plant-maintenance work.· Signs of tighter-than-usual supply in H1 2025 curb build-up of surplus volumes heading into Q3 2025.· Lack of large supply-surplus curbs need for refiners to clear larger spot shipments. · Lack of urgency to clear spot volumes curbs need for refiners to target prices that make arbitrage more feasible to outlets like Americas.· More manageable supply-surplus gives refiners opportunity to clear smaller volumes more frequently.· Recent pick-up in shipments from Taiwan to Middle East reflects such a dynamic..· Steady flow of smaller shipments slows for longer any large regional build-up of surplus supplies..· Taiwan’s base oils exports show signs of holding firm in July 2025, extending trend of steady and high flows since start of the year..· Taiwan’s share of shipments bound for China continues to shrink in 2025..· Rise in flows to other markets could complicate any moves to meet any short-term pick-up in requirements in China.· Recent jump in China’s domestic price-differential for imported supplies points to such a pick-up in requirements..· Singapore’s base oils exports revert to more typical levels over past week and past four weeks..· Steady exports from Singapore add to firm flows from Taiwan at time of year when regional demand faces seasonal slowdown.· Dynamic contrasts with H1 2025, when firm export volumes from those two markets coincided with seasonal rise in demand and tighter supply in northeast Asia.· Singapore takes delivery in past week of large shipment from Netherlands.· Shipment is first from Europe in more than a month.· Singapore’s imports from Europe/US stay relatively low even with delivery of shipment from Netherlands..· Any further pick-up in flows from Europe or US would add to regional supply at a time of year when demand typically faces seasonal slowdown.· Any sustained pick-up in Singapore’s imports from US is unlikely any time soon, with US exports to the island-state sliding in May 2025..· China’s paraffinic base oils output falls to twenty-one-month low in June 2025..· Output falls as Group II production slides to lowest since Aug 2024 amid ongoing plant-maintenance work..· Size of drop in output points to additional factors such as run-cuts.· Any such run-cuts coincide with recent slide in China’s domestic Group II light-grade base oils margins..· Lack of any significant recovery in those margins in recent weeks curbs incentive for refiners to reverse run-cuts.· Dynamic could incentivize domestic refiners to extend or implement additional plant-maintenance work.· Dynamic could leave China’s Group II base oils output lower for longer.· Any subsequent rise in China's demand for shipments from regional sources could curb their need to target more distant outlets to clear any surplus supplies.· China’s Group III base oils output extends fall to thirteen-month low in June 2025..· Dip in output fails to trigger recovery in unusually weak domestic Group III base oils price-premium to Group II base oils..· Lower output and margins point to muted Chinese demand, incentivize overseas refiners to move more Group III supplies to other markets instead..· Asia’s base oils supply fundamentals shows signs of starting Q3 2025 balanced-to-tight.· Balanced-to-tight supply curbs pressure on refiners to make significant price adjustments to clear surplus volumes.· Asia’s base oils surplus of supply over demand stays narrower than usual in May 2025 for fifth month..· Tighter surplus-supply reflects impact of lower regional production capacity, plant-maintenance work and firm lube demand.· Tight supply dynamics face prospect of easing in coming months as new production capacity comes online.· Tight supply dynamics suggest that Asia needs at least some of that additional capacity to avoid shortfall..China’s June base oils output falls.Taiwan’s June base oils exports hold firm.Asia’s May lube demand falls.Asia base oils demand outlook: Week of 14 July
