· Asia’s base oils demand likely to get support from seasonal pick-up in lube consumption at end-Q3 2024.· Muted price adjustments and signs of limited build-up of surplus supply likely to curb concern about exposure to sudden price volatility.· Upcoming plant maintenance and open arbitrage to Americas could curb further the volume of surplus regional supplies.· Prospect of more balanced fundamentals could incentivize buyers to start to lock in sufficient supplies to meet seasonal pick-up in demand.· India’s demand for light-grade base oils could get support as slowdown in imports in recent months trims supply.· China’s demand could be more mixed as prospect of pick-up in domestic supply curbs need for top-up volumes from overseas refiners.· Seasonal pick-up in demand could sustain requirements for top-up volumes.· China’s domestic Group II price premium to FOB NE Asia prices holds close to highest in more than four months..· Firm premium keeps arbitrage more feasible, pointing to ongoing interest in top-up supplies from regional market even with prospect of rise in domestic supply.· Domestic China Group I brightstock premium to FOB Asia price extends slide to lowest since Nov 2023.· Narrowing premium makes arbitrage harder to work, pointing to more muted demand..· Asia’s lube demand holds firm in June 2024 and Q2 2024 vs year-earlier levels..· Firm demand limits size of build-up of surplus base oils supplies in the region ahead of Q3 2024..· Supply surplus falls sharply in Q2 2024 from year-earlier levels more because of rising demand than a drop in supply.· Dynamic highlights importance of demand growth to sustain balanced supply-demand fundamentals.· That dynamic will need to continue and gather in pace in the coming year, when a swathe of new supply is set to enter the market..· South Korea’s base oils exports to southeast Asia rise to 22-month high in July 2024..· Rise in shipments highlights importance of southeast Asia as key outlet for South Korea’s supplies.· Rise in shipments points to still-firm demand throughout the region, following strong pick-up in consumption at end-Q2 2024.· Rise in consumption at end-Q2 2024 left the region with smaller-than-usual overhang of surplus supplies carried into Q3 2024..· Indonesia’s base oils imports rise in June 2024 from year earlier on sustained wave of shipments from Singapore.· Trend lifts Singapore’s share of Indonesia’s base oils imports to 73% of the total in H1 2024, up from 70% share in 2023 and 56% share in 2022..· Trend highlights growing focus on and importance of key regional outlets like Indonesia for refiners in Singapore and South Korea.· Both suppliers are reliant on overseas outlets for most of their shipments.· Indonesia is reliant on overseas supplies to cover its Group II requirements.· China’s growing self-sufficiency and India’s imminent start-up of new production capacity cut the attraction of targeting those markets as outlets for supplies from Singapore and South Korea.· Singapore’s share of Thailand and Pakistan’s imports also rises in H1 2024.· South Korea’s share of Vietnam and Australia’s imports rises in H1 2024..· India’s base oils demand could get support from signs of shrinking inventories as country’s imports fall to four-month low in July 2024..· Lower imports and stocks curb impact of seasonal dip in demand in month of August during monsoon season.· Lower imports and stocks raise prospect of rise in demand for replenishment supplies for delivery from end-Q3 2024.· A pick-up in demand at that time would coincide with plant maintenance-work in South Korea.· South Korea’s exports to India already stay lower than usual in July 2024 for a second month..· Dynamic raises prospect of sustaining firmer buying interest for supplies from other sources like Singapore and Saudi Arabia over the coming months.· India’s CFR Group II light-grade price premium to FOB NE Asia prices holds at highest in four months.· India’s CFR India Group II N70 premium to Singapore gasoil prices holds firm, especially compared with year-earlier levels.· Firmer premium follows sustained slowdown in imports of Group II light grades in June-July 2024..· Firmer premium and tighter supply suggests India’s demand is likely to focus more on light grades than on heavy grades.· India’s firm Group II heavy-grade imports contrast with slowdown in Group I heavy-neutrals imports..· Trend points to rising consumption of Group II heavy-grade base oils in place of Group I supplies..S Korea July base oils exports stay lower.Indonesia's June base oils imports hold firm.Asia’s June lube demand stays high
· Asia’s base oils demand likely to get support from seasonal pick-up in lube consumption at end-Q3 2024.· Muted price adjustments and signs of limited build-up of surplus supply likely to curb concern about exposure to sudden price volatility.· Upcoming plant maintenance and open arbitrage to Americas could curb further the volume of surplus regional supplies.· Prospect of more balanced fundamentals could incentivize buyers to start to lock in sufficient supplies to meet seasonal pick-up in demand.· India’s demand for light-grade base oils could get support as slowdown in imports in recent months trims supply.· China’s demand could be more mixed as prospect of pick-up in domestic supply curbs need for top-up volumes from overseas refiners.· Seasonal pick-up in demand could sustain requirements for top-up volumes.· China’s domestic Group II price premium to FOB NE Asia prices holds close to highest in more than four months..· Firm premium keeps arbitrage more feasible, pointing to ongoing interest in top-up supplies from regional market even with prospect of rise in domestic supply.· Domestic China Group I brightstock premium to FOB Asia price extends slide to lowest since Nov 2023.· Narrowing premium makes arbitrage harder to work, pointing to more muted demand..· Asia’s lube demand holds firm in June 2024 and Q2 2024 vs year-earlier levels..· Firm demand limits size of build-up of surplus base oils supplies in the region ahead of Q3 2024..· Supply surplus falls sharply in Q2 2024 from year-earlier levels more because of rising demand than a drop in supply.· Dynamic highlights importance of demand growth to sustain balanced supply-demand fundamentals.· That dynamic will need to continue and gather in pace in the coming year, when a swathe of new supply is set to enter the market..· South Korea’s base oils exports to southeast Asia rise to 22-month high in July 2024..· Rise in shipments highlights importance of southeast Asia as key outlet for South Korea’s supplies.· Rise in shipments points to still-firm demand throughout the region, following strong pick-up in consumption at end-Q2 2024.· Rise in consumption at end-Q2 2024 left the region with smaller-than-usual overhang of surplus supplies carried into Q3 2024..· Indonesia’s base oils imports rise in June 2024 from year earlier on sustained wave of shipments from Singapore.· Trend lifts Singapore’s share of Indonesia’s base oils imports to 73% of the total in H1 2024, up from 70% share in 2023 and 56% share in 2022..· Trend highlights growing focus on and importance of key regional outlets like Indonesia for refiners in Singapore and South Korea.· Both suppliers are reliant on overseas outlets for most of their shipments.· Indonesia is reliant on overseas supplies to cover its Group II requirements.· China’s growing self-sufficiency and India’s imminent start-up of new production capacity cut the attraction of targeting those markets as outlets for supplies from Singapore and South Korea.· Singapore’s share of Thailand and Pakistan’s imports also rises in H1 2024.· South Korea’s share of Vietnam and Australia’s imports rises in H1 2024..· India’s base oils demand could get support from signs of shrinking inventories as country’s imports fall to four-month low in July 2024..· Lower imports and stocks curb impact of seasonal dip in demand in month of August during monsoon season.· Lower imports and stocks raise prospect of rise in demand for replenishment supplies for delivery from end-Q3 2024.· A pick-up in demand at that time would coincide with plant maintenance-work in South Korea.· South Korea’s exports to India already stay lower than usual in July 2024 for a second month..· Dynamic raises prospect of sustaining firmer buying interest for supplies from other sources like Singapore and Saudi Arabia over the coming months.· India’s CFR Group II light-grade price premium to FOB NE Asia prices holds at highest in four months.· India’s CFR India Group II N70 premium to Singapore gasoil prices holds firm, especially compared with year-earlier levels.· Firmer premium follows sustained slowdown in imports of Group II light grades in June-July 2024..· Firmer premium and tighter supply suggests India’s demand is likely to focus more on light grades than on heavy grades.· India’s firm Group II heavy-grade imports contrast with slowdown in Group I heavy-neutrals imports..· Trend points to rising consumption of Group II heavy-grade base oils in place of Group I supplies..S Korea July base oils exports stay lower.Indonesia's June base oils imports hold firm.Asia’s June lube demand stays high
