Asia’s lube demand is likely to slip in the fourth quarter of the year from the previous three months amid a seasonal dip in consumption at year-end.The region’s base oils supply could also fall from recent levels because of scheduled and unplanned plant maintenance work that is set to extend into the fourth quarter of the year.A drop in supply would cushion the impact of slower demand, curbing the size of any build-up of surplus supplies.The region’s lube consumption is likely to fall to less than 2.35 million tonnes in the final three months of the year, down from close to 2.40 million tonnes during the third quarter, according to the Baseoilnews short-term outlook.The region faced a similar slowdown in demand during the fourth quarter of last year. But plant maintenance work in Taiwan partially countered the impact of the drop in demand, slowing a build-up of surplus supplies.A slowdown in demand during the fourth quarter of 2022 by contrast coincided with high base oils output during the second half of that year and a subsequent surge in surplus supply.Asia’s base oils prices trended higher relative to Singapore gasoil prices and relative to other regions like Europe in the fourth quarter of last year.The region’s base oils prices were unusually volatile relative to Singapore gasoil prices and weakened relative to prices in Europe during the third and fourth quarters of 2022.Asia’s base oils supply could be lower this year, especially at the start of the fourth quarter, because of plant maintenance work in markets like South Korea and Japan.A Group I base oils plant in China is also expected to close in the fourth quarter of the year.A still-open arbitrage from Asia to the Americas could trim further the size of any supply surplus heading into the fourth quarter.A smaller surplus would curb pressure on refiners to make major price adjustments in order to clear any lingering volumes..Asia base oils demand outlook: Week of 2 Sept.Thailand’s July lube demand rises.Japan’s July base oils supply stays lower.Latam lube demand set for seasonal slowdown.Base Oil News stories and analysis also available on ICIS platform
