· Asia’s base oils demand could be more cautious, with buyers procuring sufficient volumes to cover requirements, avoiding moves to build stocks.· Recent slide in crude oil prices and surging base oils premium to crude and diesel likely to raise concern that margins are less reflective of current supply-demand fundamentals.· Such a dynamic could trigger a price adjustment, with buyers preferring to hold off until any such adjustment is over..· China’s Group II and especially Group I heavy neutrals prices extend rise relative to diesel, hold firm or rise vs FOB Asia prices..· Strong price levels point to increasingly firm supply-demand fundamentals for heavy-neutrals.· Strong prices precede closure of major Group I unit in China in Oct 2024.· Plant closure likely to boost demand for replacement-supplies of Group I heavy neutrals.· Plant closure could boost demand for Group II heavy neutrals as alternative to Group I. · China’s demand for overseas supplies of Group II light grades could ease as prospect of pick-up in domestic supply boosts attraction of procuring those volumes instead..· Singapore’s base oil exports to China extend downward trend over last four weeks to lowest in more than two months..· Exports fall despite more feasible arbitrage to move cargoes from Asia to China in recent weeks.· Singapore’s base oils exports to India by contrast rise over last four weeks to highest since end-July 2024.· Rise in shipments follows signs of tighter base oils stocks in India in Q3 2024, precedes seasonal pick-up in demand over coming weeks and months..· Asia’s lube demand falls to five-month low in July 2024, pausing after strong rise in consumption during previous three months.· Asia’s lube demand stays unusually firm for month of July even with slowdown.· Asia’s average lube demand in three months to July 2024 stays high and much higher than year-earlier levels..· Firm regional base oils prices suggest blenders moved to replenish depleted stocks at start of Q3 2024, cushioning impact of rise in supply..· Philippines’ lube/base oils imports rise in July 2024 for fourth time in five months..· Sustained rise in imports adds to signs of strong lube consumption in southeast Asia market.· Philippines’ imports from South Korea and Singapore combined rise to ten-month high, provide another growing outlet for supplies from those sources..· India’s lube demand rises in August 2024 for fourth time in five months from year-earlier levels, holds relatively firm vs July 2024..· Demand holds firm at a time of year when it typically falls as monsoon rains curb market activity.· Typical drop in India’s lube demand often adds to build-up of surplus base oils supplies in Asia-Pacific market in third quarter of the year.· Stronger-than-usual demand this year curbs build-up of surplus supplies, complicates Indian blenders’ moves to replenish depleted stocks.· Stronger-than-usual lube demand and blenders’ lower stocks raise prospect of supporting stronger buying interest for additional supplies.· Stronger buying interest would coincide with closed arbitrage from US in Q3 2024 and plant-maintenance work in South Korea in Sept 2024, curbing supply.· Buying interest likely gets further boost after India’s base oils imports fall to seventeen-month low in Aug 2024..· India’s CFR Group II N150 premium to FOB NE Asia prices rises to four-month high in Aug 2024, pointing to firmer demand and facilitating arbitrage.· Firmer N150 premium coincides with signs of pick-up in shipments from South Korea to India in Aug 2024.· Firm N150 premium coincides with signs of pick-up in shipments from Saudi Arabia to India in Sept 2024, as well as large shipment from US to India.· India’s CFR N150 premium to FOB NE Asia prices falls in mid-Sept 2024 for first time since end-May 2024.· Any extension of that trend could suggest buyers have now secured sufficient volumes to cover requirements.· Recent weakness of crude oil prices adds to incentive for buyers to procure sufficient volumes but to hold off building larger inventories..Asia’s July lube demand falls.India’s August base oils imports fall.Asia base oils demand outlook: Week of 9 Sept
· Asia’s base oils demand could be more cautious, with buyers procuring sufficient volumes to cover requirements, avoiding moves to build stocks.· Recent slide in crude oil prices and surging base oils premium to crude and diesel likely to raise concern that margins are less reflective of current supply-demand fundamentals.· Such a dynamic could trigger a price adjustment, with buyers preferring to hold off until any such adjustment is over..· China’s Group II and especially Group I heavy neutrals prices extend rise relative to diesel, hold firm or rise vs FOB Asia prices..· Strong price levels point to increasingly firm supply-demand fundamentals for heavy-neutrals.· Strong prices precede closure of major Group I unit in China in Oct 2024.· Plant closure likely to boost demand for replacement-supplies of Group I heavy neutrals.· Plant closure could boost demand for Group II heavy neutrals as alternative to Group I. · China’s demand for overseas supplies of Group II light grades could ease as prospect of pick-up in domestic supply boosts attraction of procuring those volumes instead..· Singapore’s base oil exports to China extend downward trend over last four weeks to lowest in more than two months..· Exports fall despite more feasible arbitrage to move cargoes from Asia to China in recent weeks.· Singapore’s base oils exports to India by contrast rise over last four weeks to highest since end-July 2024.· Rise in shipments follows signs of tighter base oils stocks in India in Q3 2024, precedes seasonal pick-up in demand over coming weeks and months..· Asia’s lube demand falls to five-month low in July 2024, pausing after strong rise in consumption during previous three months.· Asia’s lube demand stays unusually firm for month of July even with slowdown.· Asia’s average lube demand in three months to July 2024 stays high and much higher than year-earlier levels..· Firm regional base oils prices suggest blenders moved to replenish depleted stocks at start of Q3 2024, cushioning impact of rise in supply..· Philippines’ lube/base oils imports rise in July 2024 for fourth time in five months..· Sustained rise in imports adds to signs of strong lube consumption in southeast Asia market.· Philippines’ imports from South Korea and Singapore combined rise to ten-month high, provide another growing outlet for supplies from those sources..· India’s lube demand rises in August 2024 for fourth time in five months from year-earlier levels, holds relatively firm vs July 2024..· Demand holds firm at a time of year when it typically falls as monsoon rains curb market activity.· Typical drop in India’s lube demand often adds to build-up of surplus base oils supplies in Asia-Pacific market in third quarter of the year.· Stronger-than-usual demand this year curbs build-up of surplus supplies, complicates Indian blenders’ moves to replenish depleted stocks.· Stronger-than-usual lube demand and blenders’ lower stocks raise prospect of supporting stronger buying interest for additional supplies.· Stronger buying interest would coincide with closed arbitrage from US in Q3 2024 and plant-maintenance work in South Korea in Sept 2024, curbing supply.· Buying interest likely gets further boost after India’s base oils imports fall to seventeen-month low in Aug 2024..· India’s CFR Group II N150 premium to FOB NE Asia prices rises to four-month high in Aug 2024, pointing to firmer demand and facilitating arbitrage.· Firmer N150 premium coincides with signs of pick-up in shipments from South Korea to India in Aug 2024.· Firm N150 premium coincides with signs of pick-up in shipments from Saudi Arabia to India in Sept 2024, as well as large shipment from US to India.· India’s CFR N150 premium to FOB NE Asia prices falls in mid-Sept 2024 for first time since end-May 2024.· Any extension of that trend could suggest buyers have now secured sufficient volumes to cover requirements.· Recent weakness of crude oil prices adds to incentive for buyers to procure sufficient volumes but to hold off building larger inventories..Asia’s July lube demand falls.India’s August base oils imports fall.Asia base oils demand outlook: Week of 9 Sept
