· Asia’s base oils demand could hold steady even with high heavy-grade prices and seasonal slowdown in consumption at start of Q2 2025.· Asia’s lube demand likely to peak in month of March, before holding at lower levels over following months..· Lube demand in Q2 2025 likely to remain well above levels in Q1 2025 even with slowdown at start of Q2 2025.· Firm demand likely to sustain ongoing requirements for supplies.· Prospect of ongoing plant maintenance work in Q2 2025 could curb speed of pick-up in supplies.· Dynamic could leave fundamentals relatively balanced..· China’s base oils demand shows mixed signals.· China’s domestic Group II N500 price extends fall vs diesel and vs FOB Asia cargo price..· China’s domestic Group II N150 price by contrast rises vs diesel, steadies vs FOB Asia cargo price.· China’s domestic Group I brightstock premium to FOB Asia cargo price extends rebound..· Diverging price trends coincide with round of domestic plant maintenance in China and sustained rise in shipments from southeast Asia to China in Feb-March 2025..· Singapore’s base oils exports to China and southeast Asia remain at elevated levels over past four weeks..· Rise in shipments to China likely consists mostly of term cargoes.· Rise in shipments to China helps to cover for domestic plant maintenance work.· Rise in shipments to southeast Asia balances out any slowdown in flows from South Korea, and signs of slowdown in shipments from Taiwan to the region in March 2025.· Rise in shipments follows sustained pick-up in Asia exports to southeast Asia in Feb 2025..· Rise in exports to southeast Asia in Jan-Feb 2025 enables blenders to replenish stocks ahead of typical seasonal rise in demand in month of March..· India’s base oils demand could be more mixed.· Seasonal rise in lube demand in month of March likely to leave blenders with depleted stocks.· Prospect of seasonal slowdown in demand at start of Q2 2025 curbs urgency to replenish stocks.· Any slowdown could be short-lived, with buyers typically seeking to replenish stocks ahead of monsoon season that usually starts in month of June.· Plant maintenance in India, Asia, and US during Q2 2025 could curb availability of surplus volumes from those sources over coming weeks.· Premium of CFR India Group II prices over FOB Asia prices widens but remains at levels that complicate arbitrage..· Narrow premium points to still-cautious buying interest.· Widening premium could point to pick-up in that buying interest.· CFR India Group II light-grade premium to FOB Asia cargo price widens more than heavy-grade premium..· Still-low CFR Group II heavy-grade premium follows rise in India’s Group I/II heavy-grade imports to multi-year high in Feb 2025..· Group I base oils account for rising share of those supplies.· Trend adds to signs of increasingly high Group II prices relative to Group I incentivizing switch away from premium-grade base oils.· Signs of ready availability of Group I base oils facilitates such a switch..· Firmer CFR Group II very-light grade and light-grade premium to FOB Asia N150 cargo price follows dip in India’s very-light-grade base oils imports to eighteen-month low in Feb 2025..· Supplies could get boost in March-April 2025 amid rebound in shipments of very-light grades from markets like Qatar, pick-up in shipments from other sources in Middle East, and arrival of cargo from Spain..· Those supplies would follow rebound in South Korea’s base oils exports to India to six-month high in Feb 2025..· Likely arrival of shipments around H2 March/H1 April 2025 would coincide with seasonal slowdown in demand at start of India’s new financial year from start of April 2025.· Indian buyers’ low stocks and ongoing plant maintenance could support ongoing buying interest.· Pick-up in flows from various other sources could facilitate moves to replenish stocks, limiting extent of any upward price pressure..India Feb heavy-grade base oils imports rise.Asia base oils demand outlook: Week of 17 March
