· Asia’s base oils demand shows signs of holding steady for term volumes, with more mixed buying interest for spot volumes.· Ongoing gradual fall in base oil prices, high base oils margins, lower crude oil prices in Aug 2024 and signs of heathy availability of supply incentivize buyers to hold off securing additional supplies.· Premium of CFR India Group II light-grade prices over FOB NE Asia prices extends its recovery, making arbitrage more feasible.· Premium of China’s Group II prices over FOB NE Asia prices edges lower after rising steadily in recent weeks.· Diverging trends could point to pick-up in light-grade base oils demand in India relative to China.· China’s domestic Group I light, heavy-grade and brightstock price premium to FOB Asia prices also falls.· Domestic Group II light and heavy-grade premium to domestic diesel prices also falls.· Any extension of that simultaneous fall in base oils premiums would point to more muted Chinese demand.· Any such slowdown would come at a time of year when demand typically gets a boost ahead of seasonal pick-up in consumption at end-Q3.· China’s domestic Group II premium to FOB NE Asia remains relatively high for now even after recent correction.· Widening premium in recent months follows dip in China’s domestic output to ten-month low in July 2024..· Steady fall in domestic output in recent months boosts attraction of/need for additional overseas base oils supplies.· Singapore’s base oils exports to China surge in past week and stay high over last four weeks..· Sustained rise in shipments since early-July 2024 coincides with China’s lower output and firmer domestic prices vs FOB NE Asia prices.· Pick-up in shipments coincides with signs of rise in cargo flows from Taiwan to China in Aug 2024.· By contrast, any further drop in China’s domestic Group II premium to FOB NE Asia prices could point to recovery in domestic output or sufficient supply, curbing need for additional overseas shipments. · Any slowdown in China’s demand for overseas supplies would boost regional refiners’ reliance on southeast Asia and India to absorb more of their supplies..· Signs of firmer-than-usual lube demand in Asia at end-Q2 2024 curb size of regional base oil supply surplus, leave blenders with leaner stocks at start of Q3 2024.· Thailand’s lube demand rises unexpectedly fast in June 2024, outpacing consumption in month of March, when demand usually peaks each year..· Strong demand adds to signs of steady-to-firm consumption throughout southeast Asia at end-Q2 2024.· Firmer demand contrasts with sharp dip in Asia’s base oils exports at end-Q2 2024..· Slide in exports and steady-to-firm demand raises prospect of leaving blenders with lower stocks heading into Q3 2024..· Thailand’s demand for base oils from domestic sources accounts for smaller-than-usual share of country’s total base oils and lube consumption in May-June 2024..· Smaller share of total sales contrasts with surging base oils imports.· Trend adds to signs that Thailand’s blenders are using growing share of premium-grade base oils in their formulations.· Thailand’s base oils exports fall in June 2024 despite firm prices and tight regional Group I supply..· Slowdown in exports suggests that changes in Thailand’s domestic market are the main driver behind domestic refiners’ production plans, even if at the expense of firm margins for overseas shipments.· Dynamic forces regional buyers to target markets outside Asia for Group I supplies..· India's base oils demand shows signs of turning more mixed. · Premium of CFR India Group II light-grade base oils to FOB NE Asia prices rises to highest in almost four months.· Rising premium contrasts with falling CFR India premium to FOB Asia prices for Group II heavy grades and Group I brightstock.· Dynamic points to firmer demand for overseas supplies of light grades than heavy grades.· India’s lube demand holds firm in July 2024, following sharp upward revision to consumption in Q2 2024..· Demand revision leaves India’s base oils supply lagging demand every month since March 2024, even with rise in imports in Q2 2024..· Tighter supply coincides with signs of steady flow of shipments to India from key sources like South Korea and Singapore over the past month.· Dynamic suggests term volumes are covering requirements for now, with lube demand facing a seasonal slowdown in month of August.· Any need for additional supplies later in Q3 2024 could require that base oils prices be at levels that attract more spot volumes..· Current spot prices hold at levels that keep shut the arbitrage from US but start to make more feasible the shipment of any additional light-grade supplies from Asia.· Cargo flows from Saudi Arabia to India pause for more than a month, with the next shipment scheduled to reach India in H2 August 2024.· Several shipments of Group III base oils move from Middle East to India in early-Aug 2024.· Shipments point to pick-up in surplus volumes, supplement India’s supply from regular sources.· Shipments could reflect competitive Group III base oils prices relative to Group II base oils, incentivizing Indian buyers to target more Group III supplies..China’s July base oils output falls.India’s July lube demand holds firm.Thailand’s June lube demand rises
· Asia’s base oils demand shows signs of holding steady for term volumes, with more mixed buying interest for spot volumes.· Ongoing gradual fall in base oil prices, high base oils margins, lower crude oil prices in Aug 2024 and signs of heathy availability of supply incentivize buyers to hold off securing additional supplies.· Premium of CFR India Group II light-grade prices over FOB NE Asia prices extends its recovery, making arbitrage more feasible.· Premium of China’s Group II prices over FOB NE Asia prices edges lower after rising steadily in recent weeks.· Diverging trends could point to pick-up in light-grade base oils demand in India relative to China.· China’s domestic Group I light, heavy-grade and brightstock price premium to FOB Asia prices also falls.· Domestic Group II light and heavy-grade premium to domestic diesel prices also falls.· Any extension of that simultaneous fall in base oils premiums would point to more muted Chinese demand.· Any such slowdown would come at a time of year when demand typically gets a boost ahead of seasonal pick-up in consumption at end-Q3.· China’s domestic Group II premium to FOB NE Asia remains relatively high for now even after recent correction.· Widening premium in recent months follows dip in China’s domestic output to ten-month low in July 2024..· Steady fall in domestic output in recent months boosts attraction of/need for additional overseas base oils supplies.· Singapore’s base oils exports to China surge in past week and stay high over last four weeks..· Sustained rise in shipments since early-July 2024 coincides with China’s lower output and firmer domestic prices vs FOB NE Asia prices.· Pick-up in shipments coincides with signs of rise in cargo flows from Taiwan to China in Aug 2024.· By contrast, any further drop in China’s domestic Group II premium to FOB NE Asia prices could point to recovery in domestic output or sufficient supply, curbing need for additional overseas shipments. · Any slowdown in China’s demand for overseas supplies would boost regional refiners’ reliance on southeast Asia and India to absorb more of their supplies..· Signs of firmer-than-usual lube demand in Asia at end-Q2 2024 curb size of regional base oil supply surplus, leave blenders with leaner stocks at start of Q3 2024.· Thailand’s lube demand rises unexpectedly fast in June 2024, outpacing consumption in month of March, when demand usually peaks each year..· Strong demand adds to signs of steady-to-firm consumption throughout southeast Asia at end-Q2 2024.· Firmer demand contrasts with sharp dip in Asia’s base oils exports at end-Q2 2024..· Slide in exports and steady-to-firm demand raises prospect of leaving blenders with lower stocks heading into Q3 2024..· Thailand’s demand for base oils from domestic sources accounts for smaller-than-usual share of country’s total base oils and lube consumption in May-June 2024..· Smaller share of total sales contrasts with surging base oils imports.· Trend adds to signs that Thailand’s blenders are using growing share of premium-grade base oils in their formulations.· Thailand’s base oils exports fall in June 2024 despite firm prices and tight regional Group I supply..· Slowdown in exports suggests that changes in Thailand’s domestic market are the main driver behind domestic refiners’ production plans, even if at the expense of firm margins for overseas shipments.· Dynamic forces regional buyers to target markets outside Asia for Group I supplies..· India's base oils demand shows signs of turning more mixed. · Premium of CFR India Group II light-grade base oils to FOB NE Asia prices rises to highest in almost four months.· Rising premium contrasts with falling CFR India premium to FOB Asia prices for Group II heavy grades and Group I brightstock.· Dynamic points to firmer demand for overseas supplies of light grades than heavy grades.· India’s lube demand holds firm in July 2024, following sharp upward revision to consumption in Q2 2024..· Demand revision leaves India’s base oils supply lagging demand every month since March 2024, even with rise in imports in Q2 2024..· Tighter supply coincides with signs of steady flow of shipments to India from key sources like South Korea and Singapore over the past month.· Dynamic suggests term volumes are covering requirements for now, with lube demand facing a seasonal slowdown in month of August.· Any need for additional supplies later in Q3 2024 could require that base oils prices be at levels that attract more spot volumes..· Current spot prices hold at levels that keep shut the arbitrage from US but start to make more feasible the shipment of any additional light-grade supplies from Asia.· Cargo flows from Saudi Arabia to India pause for more than a month, with the next shipment scheduled to reach India in H2 August 2024.· Several shipments of Group III base oils move from Middle East to India in early-Aug 2024.· Shipments point to pick-up in surplus volumes, supplement India’s supply from regular sources.· Shipments could reflect competitive Group III base oils prices relative to Group II base oils, incentivizing Indian buyers to target more Group III supplies..China’s July base oils output falls.India’s July lube demand holds firm.Thailand’s June lube demand rises
