Asia’s lube demand rose in May for a second month and more than expected amid a strong pick-up in consumption in markets like Japan.The stronger demand partially cushioned the impact of a rebound in the region’s base oils supply that month.Asia’s base oils supply surplus still rose strongly in May to a four-month high. But it lagged year-earlier levels for a third month.The smaller-than-usual surplus curbed pressure on the region’s refiners to adjust prices to levels that opened the arbitrage to more distant outlets.It also left them in a position to enter the third quarter of the year with a smaller supply overhang, at a time when demand faces a seasonal slowdown.Asia’s lube consumption recovered to more than 800,000 tonnes in May, government and industry data showed.The volume excluded China.The volume rose from less than 740,000 tonnes the previous month and by 3% from year-earlier levels.The rise in demand in the month of May from April followed a typical seasonal pattern. Consumption then usually falls in the month of June from May.Demand rose by more than 15% in northeast Asia, mostly because of strong consumption in Japan. The increase outweighed an 11% fall in consumption in southeast Asia.Demand still lagged the region’s supply by more than 140,000 tonnes in May, widening from close to 100,000 tonnes the previous month.But the supply surplus of close to 250,000 tonnes in April and May combined was down from more than 380,000 tonnes during the same period last year and from more than 500,000 tonnes during the same period in 2022.The larger surpluses in 2022 and 2023 put pressure on regional refiners to adjust prices to levels that helped to clear the volumes.Asia-Pacific base oils margins also fell sharply in response.The smaller surplus in April and May this year left refiners better positioned to avoid such an outcome over the coming months..Thailand’s May lube demand rises.Japan’s May base oils supply lags demand
Asia’s lube demand rose in May for a second month and more than expected amid a strong pick-up in consumption in markets like Japan.The stronger demand partially cushioned the impact of a rebound in the region’s base oils supply that month.Asia’s base oils supply surplus still rose strongly in May to a four-month high. But it lagged year-earlier levels for a third month.The smaller-than-usual surplus curbed pressure on the region’s refiners to adjust prices to levels that opened the arbitrage to more distant outlets.It also left them in a position to enter the third quarter of the year with a smaller supply overhang, at a time when demand faces a seasonal slowdown.Asia’s lube consumption recovered to more than 800,000 tonnes in May, government and industry data showed.The volume excluded China.The volume rose from less than 740,000 tonnes the previous month and by 3% from year-earlier levels.The rise in demand in the month of May from April followed a typical seasonal pattern. Consumption then usually falls in the month of June from May.Demand rose by more than 15% in northeast Asia, mostly because of strong consumption in Japan. The increase outweighed an 11% fall in consumption in southeast Asia.Demand still lagged the region’s supply by more than 140,000 tonnes in May, widening from close to 100,000 tonnes the previous month.But the supply surplus of close to 250,000 tonnes in April and May combined was down from more than 380,000 tonnes during the same period last year and from more than 500,000 tonnes during the same period in 2022.The larger surpluses in 2022 and 2023 put pressure on regional refiners to adjust prices to levels that helped to clear the volumes.Asia-Pacific base oils margins also fell sharply in response.The smaller surplus in April and May this year left refiners better positioned to avoid such an outcome over the coming months..Thailand’s May lube demand rises.Japan’s May base oils supply lags demand
