Asia base oils demand outlook: Week of 10 November

·         Asia’s base oils demand likely to stay muted.

·         Expectations of healthy availability of supply and seasonal slowdown in demand curb urgency to lock in additional volumes.

·         Seasonal slowdown could limit immediate impact of any adjustment in base oils output because of lower margins.

·         Downward price-pressure for heavy-grade base oils grades adds to incentive to work down existing stocks first.

·         Closed arbitrage to Americas and seasonal slowdown in outlets like Europe curb opportunity to target those markets with more supplies.

·         Dynamic increases reliance on demand in Asia-Pacific market to absorb any surplus supplies.

·         Imported cargo price-premiums to FOB Asia prices stay firm in markets like India and China, pointing to ongoing buying interest in those markets.

·         Demand in southeast Asia also showed signs of holding firm.

·         China’s domestic Group II light-grade base oils price premium to Shandong diesel holds firm, while premium to FOB Asia cargo prices extends rise to highest in more than four months.

·         Ongoing strength of China's Group II light-grade prices coincides with restart of more domestic production capacity following maintenance work.

·         Ongoing strength of Group II light-grade prices and prospect of rise in supply points to firmer-than-usual demand at time of year when it typically slows.

·         Demand in southeast Asia shows more mixed signals.

·         Singapore’s base oils exports to southeast Asia fall over last four weeks to lowest level in almost six months.

·         Sustained slowdown in shipments since late-Sept 2025 could reflect buyers’ more muted demand.

·         Slowdown in shipments follows signs of balanced stocks in southeast Asia at end-Q3 2025.

·         Asia’s base oils exports to southeast Asia lag demand in the region in Sept 2025 for first time in three months.

·         Exports lag demand even with high shipment-volumes to the region.

·         Shortfall coincides with increasingly mixed demand dynamics in southeast Asia.  

·         Philippines’ base oils/lube imports fall in Sept 2025 for seventh month, pointing to anaemic demand in that country.

·         Fall in shipments coincides with slowdown in Vietnam’s base oils imports but rise in lube imports in Sept 2025.

·         Either way, steady-to-firm region-wide demand would speed up consumption of inventories and need to replenish those supplies.

·         Steady-to-firm demand would also slow build-up of surplus supplies in Asia, curbing need to target more distant markets with those volumes.

·         Japan’s base oils demand falls in Sept 2025 for seventh time in eight months.

·         Rising supply in Japan and in Asia in Sept 2025 magnifies impact of any slowdown in regional demand.

·         Japan’s base oils supply duly exceeds total demand in Sept 2025 by largest volume in 38 months.

·         Slowdown in demand and rise in surplus supply raises prospect of need to target more distant markets with surplus shipments.

·         Any such moves could add to downward pressure on Group I base oils prices.

·         India’s base oils demand could get support from likely slowdown in supplies from Saudi Arabia over coming months.

·         Expectations of pick-up in surplus availability from other key sources in Asia and other regions could curb buyers’ urgency to lock in alternative shipments.

·         Signs of high import volumes in Oct 2025 help to replenish blenders’ stocks, adding to buyers’ flexibility over timing of procurement of additional supplies.

·         Signs of slowdown in shipments to India from other key sources in recent weeks could trigger fall in India’s imports in Nov 2025.

·         Singapore’s base oils exports to India over last four weeks extend slide to lowest level since mid-Sept 2025.

·         Any clear slowdown in India’s total imports in coming weeks could support steadier buying interest.

·         India’s imported Group II base oils price-premium to FOB Asia cargo prices holds firm.

·         Firm price-premium keeps arbitrage open, points to steady buying interest.

·         India’s imported Group II very-light-grade price-discount to domestic retail diesel prices continues to weaken to narrowest level in more than a year.

·         Narrower price-discount to retail diesel price could start to curb demand for very-light grade base oils.

·         Increasingly squeezed very-light-grade base oils price-premium to Singapore gasoil conversely keeps pressure on rise in outright CFR N70 price.

·         Any such rise in outright price could curb further any dip in buying interest in the supplies.