· Asia’s Group II base oils prices stay firm relative to feedstock and gasoil prices.· Firm margins point to still-balanced-to-tight fundamentals, sustaining incentive for refiners to maintain high output.· Margins hold firm despite scant scheduled plant-maintenance work and expected start-up of new production and shipments in coming weeks.· Firm margins could magnify impact of any such rise in production capacity unless demand holds firm.· Firm margins through Q3 2025 reflect signs of Asia’s more muted rise in surplus supplies extending through the quarter.· Some signs of pick-up in supplies in recent weeks could trigger rise in surplus volumes in Q4 2025 unless demand holds firm or output falls.· Any such rise in surplus supply could put pressure on prices to respond to incentivize lower output or to facilitate arbitrage shipments to other markets.· Arbitrage to move supplies to other markets instead gets more complicated for Group II light grades especially.· Asia Group II light-grade discount to US export prices holds at narrowest level in more than a year..· Asia Group II light-grade price-discount to domestic Europe prices stays wide, but holds in narrow range in recent weeks and down from peak levels in early Q3 2025.· Asia Group II light-grades could face growing pressure from US supplies, whose price-discount to Europe prices widens more sharply during Q3 2025 to levels that are similar to Asia price-discount to Europe prices..· Any pressure from surplus supply in Asia stays more manageable so far in Q3 2025 amid dip in shipments from some of Asia’s key producers.· South Korea’s base oils exports fall to three-month low in Aug 2025..· Exports fall despite completion of plant-maintenance work at end-Q2 2025..· Lower exports coincide with drop in shipments from Taiwan in Aug 2025 from previous month.· Singapore’s exports from domestic refiners also stay lower than usual in Aug 2025..· Lower exports from Asia’s key suppliers cushion impact of seasonal slowdown in regional demand in Q3 2025.· South Korea’s base oils shipments to India rise in Aug 2025 even as total exports fall, trimming further size of any surplus volumes..· Asia’s Group II base oils prices hold steady relative to markets like India and Middle East and firm relative to US export prices so far in Q3 2025.· Firm prices and closed arbitrage to Americas point to lack of build-up of surplus volumes or pressure to clear the volumes.· Slump in South Korea’s base oils exports to Latin America in 2025 reflects that dynamic..· Asia’s base oils exports could be hard to sustain at lower levels if base oils output holds firm, refiners’ and blenders’ stocks are replenished, and as new production capacity comes online.· Additional production capacity includes new unit in Singapore.· Singapore’s exports from domestic plants over past four weeks extend strong rebound to highest since start of Q3 2025..· Exports in past week include largest cargo to US in more than two years.· Exports in past week include largest shipment to UAE in more than six years..· Pick-up in Singapore’s base oils exports to UAE in recent months consists of re-exported supplies that originate from other markets.· Exports in past week include supplies from domestic sources.· Unusual change in Singapore’s trade flows could point to recent change in production dynamics..· Singapore’s own supplies also get boost from arrival in past week of additional supplies from US, as well as from Russia..· Shipment from US lifts Singapore's total imports from the country to highest four-week total since H1 April 2025.· Imports help to remove supplies from US domestic market, slowing build-up of surplus volumes.· Imports from US likely to slow down once new production capacity in Singapore is up and running.· Slowdown in imports would force US supplies to target other outlets instead..· Taiwan’s base oils exports hold firm so far in Sept 2025.· High volumes extend period of persistently-high exports from Taiwan so far this year..S Korea’s August base oils exports fall.Asia base oils demand outlook: Week of 22 September.Asia base oils supply outlook: Week of 15 September.Base Oil News stories and analysis also available on ICIS platform
