· Asia’s base oils demand could be more mixed even with prospect of seasonal pick-up in lube consumption in China and India at end-Q3.· Increasingly firm base oils values versus feedstock/competing fuel prices could incentivize buyers to trim procurement plans amid concern about divergence between margins and supply-demand fundamentals.· Demand in southeast Asia could be more muted amid signs of surge in shipments to the region at start of Q3 2024..· Rise in shipments likely replenishes blenders’ inventories, curbing urgency to seek additional volumes..· Southeast Asia remains key outlet for shipments from Singapore in recent weeks..· High volumes follow on from surge in shipments to southeast Asia in July 2024, adding to regional supplies..· Singapore’s share of Vietnam’s base oils imports extends its slide, dipping to around 30% of the total in July 2024.· Share falls from 42% of the total in Jan-July 2024 and from 47% in 2023.· South Korea’s share of Vietnam’s base oils imports rises to 48% in Jan-July 2024, after lagging Singapore in at least the last four years..· Vietnam is key base oils outlet for Singapore and South Korea as rising base oils production in China, and soon India, curb overseas base oils requirements in those markets..· Prospect of recovery in domestic base oils production in China likely to curb need for additional volumes from regional sources.· China’s domestic base oils demand shows signs of holding firmer in Q3 2024 than in Q3 2023.· China's domestic Group II base oils values hold firm vs diesel prices and vs FOB NE Asia cargo prices, especially for heavy grades, even as supply outpaces year-earlier levels in July 2024..· Firm prices point to more balanced supply-demand fundamentals compared with same time last year, even with higher supply vs that period.· More balanced fundamentals raise prospect of stronger pick-up in domestic demand in late-Q3 2024.· Impact on overseas supplies of any such pick-up in demand partly depends on size of any recovery in China’s domestic base oils output..· India’s base oils demand could get support from prospect of limited supply-build in first two months of Q3 2024.· Any pick-up in India’s demand likely to focus more on light grades than heavy grades, whose supplies surged in July 2024.· India’s CFR Group II N150 premium to FOB NE Asia price holds firm at highest since start of Q2 2024.· India’s CFR India Group II N500 price falls to discount to FOB NE Asia price for first time in more than two years.· Wider Group II N150 premium points to firmer demand for light-grade base oils, more muted buying interest in heavy grades.· Light-grade price dynamics follow drop in Group II/III light-grade and very-light-grade imports in July 2024 to four-month low..· Drop in imports cuts buyers’ stocks, adds to need for additional volumes to replenish supplies in preparation for seasonal pick-up in demand. · Weaker heavy-grade price dynamics follow rebound in imports of Group II/III heavy-grade base oils in July 2024.· Rebound in imports replenishes buyers’ stocks, curbing urgency to seek additional volumes..India’s July Group II imports stay lower.China’s July base oils imports fall
· Asia’s base oils demand could be more mixed even with prospect of seasonal pick-up in lube consumption in China and India at end-Q3.· Increasingly firm base oils values versus feedstock/competing fuel prices could incentivize buyers to trim procurement plans amid concern about divergence between margins and supply-demand fundamentals.· Demand in southeast Asia could be more muted amid signs of surge in shipments to the region at start of Q3 2024..· Rise in shipments likely replenishes blenders’ inventories, curbing urgency to seek additional volumes..· Southeast Asia remains key outlet for shipments from Singapore in recent weeks..· High volumes follow on from surge in shipments to southeast Asia in July 2024, adding to regional supplies..· Singapore’s share of Vietnam’s base oils imports extends its slide, dipping to around 30% of the total in July 2024.· Share falls from 42% of the total in Jan-July 2024 and from 47% in 2023.· South Korea’s share of Vietnam’s base oils imports rises to 48% in Jan-July 2024, after lagging Singapore in at least the last four years..· Vietnam is key base oils outlet for Singapore and South Korea as rising base oils production in China, and soon India, curb overseas base oils requirements in those markets..· Prospect of recovery in domestic base oils production in China likely to curb need for additional volumes from regional sources.· China’s domestic base oils demand shows signs of holding firmer in Q3 2024 than in Q3 2023.· China's domestic Group II base oils values hold firm vs diesel prices and vs FOB NE Asia cargo prices, especially for heavy grades, even as supply outpaces year-earlier levels in July 2024..· Firm prices point to more balanced supply-demand fundamentals compared with same time last year, even with higher supply vs that period.· More balanced fundamentals raise prospect of stronger pick-up in domestic demand in late-Q3 2024.· Impact on overseas supplies of any such pick-up in demand partly depends on size of any recovery in China’s domestic base oils output..· India’s base oils demand could get support from prospect of limited supply-build in first two months of Q3 2024.· Any pick-up in India’s demand likely to focus more on light grades than heavy grades, whose supplies surged in July 2024.· India’s CFR Group II N150 premium to FOB NE Asia price holds firm at highest since start of Q2 2024.· India’s CFR India Group II N500 price falls to discount to FOB NE Asia price for first time in more than two years.· Wider Group II N150 premium points to firmer demand for light-grade base oils, more muted buying interest in heavy grades.· Light-grade price dynamics follow drop in Group II/III light-grade and very-light-grade imports in July 2024 to four-month low..· Drop in imports cuts buyers’ stocks, adds to need for additional volumes to replenish supplies in preparation for seasonal pick-up in demand. · Weaker heavy-grade price dynamics follow rebound in imports of Group II/III heavy-grade base oils in July 2024.· Rebound in imports replenishes buyers’ stocks, curbing urgency to seek additional volumes..India’s July Group II imports stay lower.China’s July base oils imports fall
