· Asia’s base oils demand could stay more cautious amid expectations of healthy availability of supply, concern about exposure to lower prices.· Cautious buying would coincide with likely seasonal pick-up in lube consumption in coming weeks.· Dynamic leaves blenders facing challenge of holding sufficient supplies to meet finished lube demand while maximising benefit of any further fall in base oils prices.· Expectations of healthy availability of supply incentivize blenders to procure smaller volumes more frequently.· Signs that blenders replenished inventories earlier in Q3 2025 give them additional flexibility and incentive to procure smaller volumes.· Lack of any significant price-volatility so far in Q3 2025 coincides with signs that any build-up of surplus supplies remains manageable.· Dynamic could incentivize buyers to maintain scheduled procurement plans..· Asia’s base oils demand shows signs of holding firmer than expected at start of Q3 2025.· Dynamic could reflect blenders’ moves to replenish low stocks after tight fundamentals in H1 2025 complicated such moves.· Dynamic could also reflect rising end-user consumption.· With replenished stocks, blenders could face less urgency to seek additional volumes later in Q3 2025.· South Korea’s base oils demand rises in July 2025 for fourth time in five months from year-earlier levels..· Firm demand mirrors steady rise in South Korea’s leading economic indicators.· Japan’s base oils demand edges down in July 2025 from year-earlier levels..· Pace of contraction slows sharply vs four months to May 2025, while demand in June-July 2025 still rises from year-earlier levels.· Steadier demand adds to signs of firmer-than-expected consumption in Asia at start of Q3 2025..· Demand in southeast Asia could face more muted pick-up in requirements in coming weeks if blenders are comfortable with current inventories.· Dynamic could leave blenders topping up stocks with smaller volumes.· Singapore’s base oils exports to southeast Asia show signs of holding steady in Aug 2025..· Shipments hold steady in July-Aug 2025 but account for larger share of Singapore’s total exports than in Q2 2025.· Higher share of shipments coincides with signs of firmer demand in southeast Asia than in other markets.· Ex-tank Singapore Group II heavy-grade price-premium to FOB Asia cargo price stays unusually high even as it edges lower at end-Aug 2025..· Steep price-premium points to rise in surplus supplies of Group II heavy grades.· Steep price-premium points to muted impact on ex-tank Singapore prices of rise in surplus supplies.· Any extension of drop in price-premium at end-Aug 2025 could point to rise in surplus supplies starting to have larger impact on ex-tank and southeast Asia market..· China’s base oils demand typically gets support from seasonal pick-up in lube consumption in late-Q3.· China’s domestic Group II light-grade base oils prices rise relative to diesel and relative to FOB Asia cargo prices in recent weeks..· China’s domestic Group I base oils prices also extend rise versus diesel and FOB Asia cargo prices..· Rising price-differentials make arbitrage more feasible.· Rising price-differentials point to firmer supply-demand fundamentals..· India’s base oils demand could hold steady amid signs that blenders’ stocks remain balanced-to-tight.· India’s base oils supply exceeds demand in July 2025, partially balancing out shortfall in June 2025..· Asia’s base oils export volume to India is typically about 40% of the country’s import volume the following month.· Extension of that trend, following slump in Asia’s exports to India in July 2025, raises prospect of fall in India’s imports in Aug 2025..· Fall in imports would cushion impact of seasonal slowdown in demand, leaving net supply relatively balanced.· More balanced net supply would curb any significant build-up of blenders’ stocks ahead of seasonal pick-up in consumption from end-Q3.· Prospect of ongoing need for additional shipments coincides with signs of improving surplus supply in overseas markets.· India’s CFR Group II base oils price-premium to FOB Asia cargo price holds in relatively narrow range since April 2025, especially for heavy grades..· Range-bound price-premium points to ongoing buying interest.· Buyers face challenge of securing sufficient supplies while managing exposure to risk of lower prices in response to rising availability.· Dynamic incentivizes buyers to procure smaller volumes more frequently in order to average down and benefit from any downward price adjustments.· Singapore’s base oils exports to India show signs of rising in Aug 2025 from unusually low level in July 2025..· Exports remain lower than during four months to end-June 2025.· Lower exports could reflect signs of more cautious demand..India’s July base oils supply outpaces demand.South Korea’s July base oils output rises.Japan’s July base oils exports fall.Asia base oils demand outlook: Week of 25 August.Base Oil News stories and analysis also available on ICIS platform
