· Asia’s base oils demand could stay more cautious as signs of healthy stocks and rising supplies curb urgency to buy.· Any need to move surplus supplies to markets beyond Asia could put pressure on adjustment in prices to make those shipments more feasible.· Any such moves, and the subsequent prospect of additional price-pressure, could add to attraction of procuring smaller volumes more frequently..· China’s demand for overseas base oils supplies could ease if country’s domestic base oils output stays at more elevated levels in Q4 2025.· China’s domestic base oils prices would need weaken relative to FOB Asia cargo prices to make arbitrage less attractive.· Recent downward pressure on FOB Asia cargo prices means China’s domestic prices would need to fall even more steeply to make arbitrage less feasible.· China’s domestic Group II light-grade prices instead hold steady vs FOB Asia cargo prices, while Group I heavy-neutrals base oils prices extend rise vs FOB Asia cargo prices..· Rising domestic Group I price-premium follows fall in China’s Group I base oils output in Sept 2025 to close to lowest level in more than four years..· Rising domestic Group I price-premium and lower output points to recurring demand and insufficient supply to meet that demand.· Insufficient supply to meet demand contrasts with pick-up in offers of spot volumes of Group I base oils from northeast Asia that add to downward pressure on FOB Asia cargo prices..· Demand in southeast Asia could stay more muted amid signs of healthy supply and more mixed consumption.· Vietnam’s base oils imports fall in Aug 2025 for first time in three months..· Lower imports coincide with weaker consumption in other markets like Thailand and Philippines.· Lower demand coincides with signs of healthy availability of supply extending at least through to end-Q3 2025.· Lower demand and healthy availability of supply incentivize buyers to work down existing stocks first.· Singapore’s base oils exports to southeast Asia over last four weeks extend recent fall..· Slowdown in shipments could reflect blenders’ moves to work down existing stocks first..· India’s demand for additional base oils supplies could hold firm amid signs of more balanced, rather than high inventories as strong domestic lube demand speeds up consumption of supplies.· India’s lube consumption rises in Sept 2025 for third straight month from year-earlier levels, reflecting that dynamic..· Demand could get further support from seasonal rise in consumption during festival season, and additional boost following India’s move in Sept 2025 to cut its sales tax on items like vehicles.· India’s passenger-vehicle sales rise in Sept 2025 at strongest pace in six months amid boost from lower sales tax..· Blenders face challenge of keeping base oils stocks at healthy levels to meet domestic demand while minimizing their exposure to any further drop in base oils prices.· Signs of strong rebound in India’s base oils imports in Sept 2025 help to boost those stocks.· Buyers face challenging of balancing prospect of improving base oils supply in coming months with pockets of tightness because of plant-maintenance in India and Middle East during Q4 2025.· Dynamic incentivizes blenders to procure smaller volumes more frequently.· Such a strategy could benefit suppliers in logistically-closer markets like Middle East and southeast Asia.· Shorter shipment-time for those supplies also limits exposure to price-volatility during period between procurement and delivery of the supplies.· Recent start-up of new base oils unit in Singapore adds to feasibility of procuring more supplies from southeast Asia.· Singapore’s base oils exports to India extend rebound over past four weeks to highest level in three months..· Trend taps rise in Singapore’s production capacity, its logistical proximity to India and that country’s ongoing requirements for additional supplies.· India’s CFR Group II heavy-grade price-premium to FOB Asia cargo price stays lower; light-grade price-premium holds firm..· Diverging price-differentials point to tighter domestic supplies of light grades and healthier availability of heavy grades..· Pakistan’s base oils demand could ease following sharp pick-up in supplies in July-Aug 2025, and prospect of slowdown in economic activity because of flood-related damage during Q3 2025..· Rise in supplies and possibility of slowdown in demand could prompt buyers to temper pace of subsequent procurement plans.· Pakistan’s growing role as key outlet for Group II heavy-grade base oils from Asia and US could magnify impact of any slowdown in requirements.· Group II heavy-grade base oils accounts for close to 80% of Pakistan’s total imports in Aug 2025, and close to 60% share of total imports in Jan-Aug 2025..China’s Sept base oils output stays high.India’s September lube demand rises.Pakistan’s August base oils supply rises.Asia base oils demand outlook: Week of 6 October.Asia base oils supply outlook: Week of 6 October.Base Oil News stories and analysis also available on ICIS platform
