Asia’s lube demand rose in July for the first time in three months as firmer consumption in India and South Korea outweighed shrinking demand in markets like Thailand.Higher lube demand coincided with and cushioned the impact of a rise in Asia’s base oils output in July following the completion of most plant-maintenance work in the region.The dynamic slowed the pace of a build-up of surplus base oils supplies at the start of the third quarter of the year.The more manageable supply curbed pressure on refiners to clear large surplus volumes in more distant markets or to make large price-adjustments to facilitate such moves.Asia's lube consumption of more than 820,000 tonnes in July rose by 4% from year-earlier levels, government and industry data showed..The volume excluded China.Demand rose mostly because of a pick-up in consumption in India that extended into the month of August.The firmer consumption outweighed a 3% fall in southeast Asia’s lube demand in July, mostly because of a slump in consumption in Thailand.Stronger regional demand kept blenders’ inventories lower at a time of year when weaker consumption typically leaves them with larger stocks..Blenders’ lower stocks raised the prospect of keeping demand stronger for longer as buyers moved to replenish those inventories ahead of a seasonal pick-up in demand at the end of the third quarter.Firmer demand in July also cushioned the impact of a rise in Asia’s base oils supply to a six-month high as most plant-maintenance drew to a close.Supply still fell by 8% and for a seventh straight month from year-earlier levels.Lower supply reflected a protracted round of plant-maintenance this year, combined with the structural impact of several base oils plant-closures in the region in recent years.The surplus of supply over demand still rose in July from the previous month. But it remained relatively low and more than 50% down from the same month a year earlier.Asia’s more manageable supply and steadier demand gave refiners the leverage to focus on tapping that buying interest rather than needing to line up shipments to more distant markets like the Americas.Asia’s firm Group II base oils prices relative to US export prices in recent months reflected that dynamic. .Thailand’s July lube demand slumps.Japan’s July base oils exports fall.India’s July lube demand rises.Base Oil News stories and analysis also available on ICIS platform
