· Asia’s base oils demand could see earlier-than-usual seasonal slowdown in face of weak lube consumption and improving supply.· Asia’s lube demand falls at end-Q1 2025 from year-earlier levels..· Demand weakness shows signs of extending into Q2 2025 as uncertainty about US tariffs compounds signs of slowing economic growth.· Weak demand curbs blenders’ urgency to replenish stocks.· Weaker demand and uncertainty about outlook instead incentivizes blenders to keep lower inventories.· Weaker demand coincides with tighter supply at start of Q2 2025.· Weaker demand set to coincide with rising supply in final weeks of Q2 2025 as wave of plant maintenance work mostly draws to a close.· Weaker demand, rising supply and firm base oils margins could incentivize blenders to procure sufficient supplies just to cover term requirements..· China’s base oils demand likely to ease as seasonal slowdown in consumption and rising domestic supply cuts requirements for overseas supplies.· China’s domestic Group II N150 premium to FOB Asia cargo price extends rise to highest since early-Oct 2024..· Wide premium boosts feasibility of moving arbitrage shipments to the country.· Wide premium points to firmer-than-expected demand or tighter-than-expected supply, or domestic prices that could face pressure to close the arbitrage.· Any pick-up in arbitrage shipments, combined with weak demand fundamentals, could exacerbate a build-up of surplus supplies..· Base oils demand in southeast Asia likely to stay muted and reliant on blenders’ moves to replenish lower stocks.· Seasonal slowdown in demand from end-Q2 2025 likely to limit scope of any such stock-replenishment.· Thailand’s lube demand falls in March from month of February for first time in more than a decade..· Demand slows at a time of year when it usually gets a seasonal boost.· Weaker demand in month of March shows signs of extending to other markets in southeast Asia such as Vietnam and Philippines.· Weaker demand triggers fall in southeast Asia’s lube consumption in March from year-earlier levels at fastest pace in ten months..· Shrinking lube demand leaves blenders' base oils stocks lasting longer, curbing urgency to replenish inventories.· Asia’s base oils exports to southeast Asia exceed the region’s lube demand in March 2025 by larger-than-usual volume for second straight month..· Growing surplus in Q1 2025 contrasts with balanced supplies in Q1 2024, pointing to supply-overhang carried into Q2 2025.· Singapore’s base oils exports to southeast Asia fall in April 2025 before rebounding in recent weeks..· Recovery in shipments in recent weeks could point to blenders’ moves to replenish stocks.· Recovery in shipments could also point to improvement in demand.· Any extension of recovery in shipments, without improvement in demand, could trigger growing stock-build before seasonal slowdown in activity from end of second quarter of the year..· India’s imported Group II base oils price premium to FOB Asia cargo price holds firm, contrasting with slumping premium in May 2024..· Widening premium so far in Q2 2025 facilitates arbitrage, points to ongoing buying interest..· Any additional buying interest would coincide with mixed supply-demand fundamentals.· Any additional buying interest follows strong rise in India’s base oils imports in April 2025..· Higher imports in March-April 2025 help to replenish blenders’ depleted stocks.· India’s lube demand is typically lower in Q2 and Q3 compared with first quarter of the year.· Lower crude oil prices cut further the attraction of building larger stocks.· Any additional buying interest could reflect moves to lock in sufficient supplies before monsoon season.· Buying interest could also point to concern about impact of simultaneous plant maintenance work in India, Middle East and Asia during Q2 2025, especially for certain base oils grades.· Imminent completion of large portion of plant maintenance work could then ease those concerns and curb that buying interest.· Buying interest could also reflect sustained demand for very-light grade base oils..India’s April base oils imports rise.Thailand’s March lube demand falls.Asia’s March lube demand falls.Asia base oils demand outlook: Week of 12 May
