· Asia’s base oils prices extend rise versus feedstock/competing fuel prices.· Increasingly firm margins coincide with closed arbitrage to more distant outlets like Americas, and less feasible arbitrage to logistically-closer markets like India and Middle East.· Firm margins and closed arbitrage point to tight supply.· Tighter supply reflects impact of plant-maintenance work, and stock-building in preparation for plant maintenance work and for seasonal rise in demand at end-Q1 2025.· Dynamic keeps Asia’s base oils exports lower than usual at end-2024 and early 2025. .· Supply-tightness could now start to ease, even with ongoing plant maintenance work, following completion of stock-building.· Closed arbitrage would magnify any improvement in supply by keeping cargoes within the region.· Asia’s base oils exports show signs of rising strongly in Feb 2025, adding to recovery in supply.· Rise in exports helps to replenish blenders’ stocks ahead of seasonal rise in demand in month of March..· Southeast Asia continues to take delivery of unusually large volume of supplies from markets like Europe and US, adding to supply.· US Group II N600 price discount to ex-tank Singapore price stays unusually wide..· Wide discount adds to attraction of moving more shipments from US to Asia.· US base oils exports to Singapore stay high than usual in Jan 2025..· Rise in exports raises prospect of pick-up in Singapore’s imports from US in coming weeks.· Singapore’s higher-than-usual base oils imports so far this year help to sustain sharp pick-up in its base oils exports in recent weeks..· Singapore’s base oils exports stay higher than usual over past week, lifting shipments over last four weeks to highest level in two years..· Sustained rise in shipments cushions impact of plant maintenance work in South Korea.· Sustained rise in shipments boosts Singapore’s share of supply in key outlets like India and southeast Asia.· Larger share of regional markets’ supply would help to facilitate placement of additional volumes when new production capacity in the city-state starts up later this year..· Sustained rise in shipments contrasts with sharp slowdown in Taiwan’s base oils exports in H1 March 2025, after surge in shipments in Jan-Feb 2025.· Exports of less than 10,000 tonnes in H1 March 2025 fall from more than 24,000 tonnes in H1 Feb 2025.· Taiwan’s exports of Group II heavy grades in Feb 2025 climb to highest in more than two years, account for more than 50% of its total exports for a second month..· Rise in shipments of heavy grades facilitates blenders’ moves to replenish stocks ahead of seasonal pick-up in demand at end-Q1 2025.· With blenders’ stocks replenished, any extension of slowdown in Taiwan’s exports through March 2025 could have more muted impact..· Thailand’s base oils supply lags demand in Jan 2025 by largest volume in seventeen months..· Shortfall reverses supply-build at end-2024, leaves Thailand with more balanced supplies ahead of seasonal rise in demand at end-Q1 2025.· More balanced supplies and firmer demand curb Thailand’s ability and need to offer more surplus volumes through export market.· Any subsequent slowdown in Thailand’s base oils exports would coincide with plant maintenance work in southeast Asia and northeast Asia in Q1 2025, sustaining squeeze on Group I supply..Taiwan's Feb base oils exports rise.Thailand’s January base oils supply falls.Thailand’s January lube demand rises.Asia base oils demand outlook: Week of 17 March
