Asia’s lube demand rose in September as a pick-up in consumption in southeast Asia added to persistently-strong demand in India.
Rising demand partially balanced a recovery in the region’s base oils output during the third quarter, curbing the pace of a build-up of surplus supplies.
The more widespread rise in consumption throughout Asia also curbed a reliance on any one particular market and cut further the impact of China’s growing self-sufficiency of base oils supply.
Asia’s total lube consumption of more than 850,000 tonnes in September rose by 4% from year-earlier levels, government data showed.
The volume, which excluded China, also got a seasonal boost after slowing to less than 810,000 tonnes in August.
Consumption in southeast Asia rose to a two-year-high in September as rising demand in markets like Thailand and Vietnam countered an ongoing slowdown in consumption in outlets like the Philippines.
Stronger demand absorbed more of the region’s base oils supplies, curbing pressure on refiners to target more distant markets like the Americas with surplus volumes.
That dynamic could get more complicated during the final months of the year, when demand usually sees a seasonal slowdown.
More muted demand would coincide with a light round of plant-maintenance over the coming months, raising the prospect of regional base oils output holding at higher levels.
Weaker demand and higher output could then trigger a pick-up in surplus supply and in arbitrage shipments targeting less regular markets.
