· Asia’s base oils demand shows signs of holding firmer than usual for time of year even as region’s lube demand faces seasonal slowdown in month of August..· Lower end-user consumption and prospect of improving availability of supply curbs need to build stocks.· Tighter-than-usual supply so far this year, lack of build-up of surplus volumes, and seasonal pick-up in demand in late-Q3 2025 could support steady demand.· Signs of ongoing requirements for additional supplies in markets like India provide refiners with convenient and regular outlets for surplus volumes..· Recent pressure on Group II heavy-grade prices could ease amid signs of more feasible arbitrage opportunities to markets like India and Middle East.· Narrowing Group II heavy-grade premium to Group I heavy-neutrals could also incentivize buyers to procure more Group II supplies instead..· China’s base oils demand shows signs of easing for both domestic and overseas supplies.· China’s Group II margins stay weak for light-grade supplies from domestic refiners, pointing to soft supply-demand fundamentals.· China’s Group II base oils price premium to FOB Asia cargo prices falls..· Lower premium includes domestic prices for imported supplies.· Volatility of base oils premium increases risk of lining up arbitrage shipments.· Fall in base oils price-premium suggests that any recent supply tightness has eased, even with domestic refiners still incentivized to trim run-rates.· South Korea’s base oils exports to China rise to four-month high in June 2025..· Any extension of rise in shipments into Q3 2025 would cushion impact of likely recovery in South Korea’s exports over coming months.· Any slowdown in China’s demand for overseas supplies could conversely force South Korea’s refiners to target other more distant markets to clear surplus volumes..· Signs of low stocks in southeast Asia could cushion impact of seasonal slowdown in lube consumption in coming weeks.· Asia’s base oils exports to southeast Asia lag demand in May 2025 by largest volume in more than a year..· Asia’s exports to southeast Asia show signs of barely covering southeast Asia demand in June 2025.· Dynamic leaves blenders with lower inventories at start of Q3 2025. · Singapore’s base oils exports to southeast Asia rise in Q2 2025, outpace South Korea’s exports to southeast Asia by largest volume in more than five years..· Singapore’s rising shipments to southeast Asia, and rising share of regional market, leave island-state well-positioned ahead of expected rise in its production capacity in coming months.· Dynamic conversely could put more pressure on supplies from South Korea to target other outlets..· India’s base oils demand shows signs of holding firm.· India’s imported Group I SN 500 cargo price-premium to FOB Asia price holds at widest level in more than a year..· Wider price-premium facilitates arbitrage to move more supplies to India.· Wider price-premium follows slump in India’s imports of Group I heavy neutrals to eighteen-month low in June 2025..· Imports of Group I heavy neutrals fall mostly because of sharp dip in supplies from Middle East.· Dynamic reflects slowdown in shipments from Iran and importance of supplies from that source.· Any sustained slowdown in Group I heavy-neutrals from Iran has multiple repercussions besides drop in outright supply.· Slowdown cut India’s supply of heavy grades at competitive prices.· Slowdown complicates buyers' moves to use more Group I base oils as alternative to higher-priced Group II base oils.· Slowdown could in turn boost demand for Group II heavy grades.· Slowdown could incentivize buyers to hold larger stocks to cover for any such unexpected drop in supplies of other base oils grades..· India’s imported Group II heavy-grade cargo price-premium to FOB Asia cargo price widens further..· Cargo price-premium widens even with firm Group II import volumes in June 2025, and even amid ongoing wave of shipments from Asia to India.· South Korea’s base oils exports to India rise to ten-month high in June 2025..· Exports rise ahead of typical slowdown in demand during monsoon season.· Exports from Singapore to India stay higher than usual over past month even with slowdown in past week..· Ongoing buying interest in higher-than-usual volumes from Asia points to steady demand, concern about tight inventories.· Any signs of firmer-than-expected demand would put additional pressure on tight inventories.· Ongoing buying interest could also reflect concern about any further disruption to availability of supplies from Middle East..S Korea's June exports to India rise.India’s June Group I SN 500 imports fall.India’s June base oils imports fall.Asia base oils demand outlook: Week of 14 July
