Asia base oils demand outlook: Week of 15 September

·         Asia’s base oils demand could get support from signs of steady requirements in markets like southeast Asia and India.

·         Regional demand could get additional support from blenders’ balanced-to-tight stocks in some markets.

·         Balanced-to-tight-stocks would boost need for regular replenishment supplies.

·         Signs that Asia-Pacific region avoided large build-up of surplus supplies in most markets during Q3 2025 curbs prospect of significant price-adjustment to help to clear the volumes.

·         Prospect of steadier prices incentivizes blenders to maintain regular procurement plans.

·         Smaller-than-usual build-up of surplus supplies partly reflects Asia’s unexpectedly firm lube demand in July 2025.

·         Firm demand leaves blenders with lower stocks heading into month of August, when consumption typically falls.

·         Lower stocks duly curb impact of expected slowdown in demand in month of August.

·         Stronger lube demand in India in Aug 2025 suggests Asia’s consumption could have stayed firmer than expected in that month as well.

·         Such a scenario would curb further any build-up of surplus supplies during Q3 2025.

·         Demand in southeast Asia could get support from signs of balanced-to-tighter stocks.

·         Southeast Asia’s lube demand falls in July 2025 for first time in four months.

·         Asia’s base oils exports to southeast Asia still lag that demand for third straight month.

·         Supply-shortfall could leave blenders with lower stocks, boosting need to seek top-up volumes.

·         Singapore’s base oils exports to southeast Asia surge in past week, especially to Vietnam.

·         Rise in shipments triggers jump in Singapore’s base oils exports to southeast Asia over past four weeks.

·         Surge in shipments could reflect pick-up in demand for replenishment supplies.

·         China’s base oils demand could face pressure if finished lube consumption lags expectations.

·         Weaker consumption could leave blenders with replenished inventories lasting longer.

·         Firm base oils margins, high domestic output and more feasible arbitrage to China in recent weeks support rise in supply to add to those inventories.

·         Weaker consumption could prompt some of those factors to reverse in coming weeks.

·         China’s domestic price for imported Group II N150 base oils extends gradual rise vs FOB Asia cargo price that began at start of 2025.

·         Rising premium sustains incentive for overseas suppliers in markets like Taiwan to line up more shipments to move to China.

·         Rising premium coincides with sustained slowdown in shipments from Taiwan to China so far this year.

·         Rising price-premium could reflect subsequent supply-tightness and need to attract additional shipments.

·         More feasible arbitrage contrasts with ongoing slowdown in Singapore’s base oils exports to China in recent weeks.

·         Slowdown could point to dip in requirements from term buyers.

·         India’s lube demand rises for second straight month in Aug 2025 from year earlier.

·         Typical seasonal rise in demand over coming months could get further boost from expected pick-up in consumer demand, including auto sales, following India’s move to cut its consumption tax.

·         India's firm lube demand contrasts with signs of sharp slowdown in base oils imports in Aug 2025, compounding pressure on blenders’ stocks.

·         Lower-than-expected stocks raise prospect of ongoing buying interest in additional shipments from overseas markets.

·         India’s imported Group II cargo prices maintain firm premium to FOB Asia and FOB US prices in H1 Sept 2025.

·         Firm price-premium facilitates shipment of more arbitrage cargoes to India, reflecting that ongoing demand for additional supplies.

·         Another shipment loads from Brazil in Aug 2025 before heading to India, illustrating ongoing demand for more arbitrage cargoes.

·         Firm demand for more arbitrage shipments coincides with signs of pick-up in demand from term buyers.

·         Singapore’s base oils exports to India extend rise over past four weeks after falling sharply during month to mid-Aug 2025.

·         Term buyers likely account for large portion of Singapore’s shipments to India.