Asia’s lube demand fell in May for the first time in six months as a dip in consumption extended from India to southeast Asia markets like Thailand and Philippines and further north to Japan.Asia’s total lube consumption of more than 830,000 tonnes in May fell from more than 850,000 tonnes in April and by 10% from year-earlier levels, government data showed.The volume excluded China.Excluding the comparison with 2024, Asia’s lube demand remained high even with expectations of lower economic growth throughout the region.Lube consumption of more than 2.60 million tonnes in the three months to May were the third-highest in more than three years, reflecting the trend of steadily-rising demand..High demand volumes this and last year contrasted with a sustained dip in Asia’s base oils output in recent years.Output was lower because of a prolonged round of plant-maintenance work, combined with several plant closures in recent years.The year-on-year fall in lube demand in May cushioned the impact of the lower supply.But still-firm consumption volumes left Asia’s surplus base oils supply unusually tight in May for a fifth month.The region’s firm base oils prices during the second quarter reflected those tight fundamentals.The premium of FOB Asia Group II heavy-grade prices over Singapore gasoil rose during the second quarter to the highest since late-2021. The premium remained at elevated levels at the start of the third quarter.The FOB Asia Group II cargo price-differential versus US export prices also remained much firmer in recent weeks than during the same period last year.The firmer price-differentials and tighter fundamentals curbed the opportunity or need to move arbitrage shipments to outlets like the Americas.Asia’s supply-demand fundamentals faced the prospect of softening during the third quarter as most plant-maintenance ends and demand faced a seasonal slowdown.Even so, the lack of any significant build-up of surplus supplies in recent months curbed pressure on the region’s refiners to clear large volumes or to make significant price-adjustments to move such shipments..Japan’s May base oils output falls.Thailand May base oil supply stays high
