Asia’s lube demand rose to a three-month high in June amid a sharp rebound in consumption in northeast Asia especially.Stronger demand contrasted with signs of steady base oils supply as a protracted round of scheduled and unplanned production issues in the region extended through the first half of the year.Firm demand and rangebound supplies continued to limit any build-up of surplus volumes.The smaller surplus curbed refiners’ need to line up arbitrage shipments to more distant markets.The consistently-tighter availability, and blenders’ lower stocks, also showed signs of extending steadier buying interest into the third quarter of the year.Asia’s total lube consumption came to more than 870,000 tonnes in June, government and industry data showed.The volume was almost the same as year-earlier levels and up from around 820,000 tonnes in May.A surge in demand in northeast Asia in June coincided with firmer consumption in southeast Asia and balanced out a drop in India's lube consumption from year-earlier levels.The firmer demand reversed a sharp dip in consumption in May, at a time when growing concern about Asia’s economic outlook incentivized blenders to hold back.The firmer demand in June coincided with improving base oils supply following the completion of most plant-maintenance in the region.But ongoing maintenance-work in several markets like Japan and South Korea curbed the size of the pick-up in supply.The larger rise in demand left Asia’s supply surplus unusually tight in June for a sixth straight month..The smaller surplus kept blenders’ stocks lower.Blenders’ lower stocks prompted their more frequent requirement to replenish inventories, with the buying extending into the third quarter of the year.The smaller surplus, combined with steadier demand, gave refiners the option of tapping those requirements and so keeping more supplies within the Asia-Pacific region.The dynamic increased the feasibility and importance of keeping open the arbitrage to regular outlets like India.It simultaneously cut the need to adjust prices to make feasible the arbitrage to more distant markets like Latin America..Thailand’s June lube demand steadies.Japan’s June base oils supply lags demand.S Korea’s June base oils output falls.Italy’s June lube demand rises.Brazil’s June lube demand extends fall.Base Oil News stories and analysis also available on ICIS platform
