· Asia’s base oils demand could be more muted in coming days as market awaits sellers’ response to lower crude oil prices.· Demand could get support from signs of firmer requirements in southeast Asia and India, countering signs of more muted buying interest from China..· China’s demand for overseas base oils supplies could stay lower as buyers cover more of their requirements with supplies from domestic refiners.· China’s base oils imports fall in Sept 2024 from month of August for first time in at least eight years..· Unusual drop in imports in month of September coincides with rebound in China’s Group II base oils output that month.· Even with rise in domestic output, supply and demand shows signs of steadying in a relatively narrow range..· Steady demand raises prospect of stronger pick-up in requirements for overseas supplies only when domestic production capacity is lower because of factors like plant shutdowns.· China’s base oils exports rise to five-month high in Sept 2024, suggesting domestic output already exceeds buyers’ requirements..· China’s domestic Group II price premium to FOB NE Asia prices narrows further, especially for heavy grades..· Narrower premium adds to signs of more muted demand from China..· Base oils demand in southeast Asia could hold firmer as dip in shipments to the region in Aug-Sep 2024 coincides with seasonal pick-up in demand at end-Q3 2024.· Exports to southeast Asia from key Asia-Pacific suppliers fall in Sept 2024 to seven-month low, after already slowing in Aug 2024..· Lower supply and firmer demand likely left blenders with lower inventories at end-Q3 2024.· Dynamic raises prospect of pick-up in stock-replenishment at start of Q4 2024.· Recent market volatility incentivizes blenders to maintain lower stocks and procure smaller volumes more frequently.· Dynamic raises prospect of more frequent procurement of smaller volumes throughout Q4 2024..· Exports from Singapore to southeast Asia show signs of staying lower in Oct 2024..· Any further drop in Asia’s shipments to southeast Asia would add to squeeze on blenders’ stocks..· Singapore’s bunker fuel sales per vessel rises for tenth month in Sept 2024 and at fastest pace in four months..· Singapore’s rising bunker fuel sales, and rising bunker fuel sales per vessel, point to higher marine lubricants requirements.· Higher marine lube requirements likely support strong demand for Group I brightstock as key feedstock to produce the lubricants..· Vietnam’s base oils imports hold firm in Sept 2024, with South Korea and Singapore accounting for more than 90% of the country’s shipments..· Vietnam’s reliance on imports for all of its base oils supplies makes country increasingly valuable as key outlet for supplies from South Korea and Singapore.· South Korea remains Vietnam’s largest supplier in first nine months of 2024, displacing Singapore for first time in at least four years..· Any extension of that trend in 2025 could be problematic for Singapore, where new production capacity is set to start operations during the year. .· India’s base oils demand could get support from firm consumption and tighter supplies from overseas markets.· CFR India Group II N500 base oils price premium to FOB NE Asia prices extends recovery; N150 premium stays high..· Firm/rising premium points to still-firm demand for additional supplies, especially for heavy grades and especially compared with other markets like China..· Expected slowdown in India’s base oils imports from South Korea in Oct-Nov 2024 likely to support firmer demand for supplies from other sources.· Drop in supplies from South Korea coincides with seasonal rise in India’s lube demand in Q4 2024, compounding impact of lower volumes.· Singapore’s base oils exports to India improve in Sept 2024, show signs of staying at similar levels in Oct 2024..· Rise in shipments remains small and insufficient to balance out drop in flows from South Korea.· Muted rise in shipments from Singapore boosts importance of pick-up in supplies from other sources like Taiwan and Saudi Arabia.· Shipments from those markets to India show signs of holding relatively firm in Oct 2024 rather than climbing to much higher levels.· India sees pick-up in imports from US in Oct 2024, with more supplies set to arrive in Nov 2024.· But a larger rise in surplus US shipments to India has yet to materialize..Vietnam’s September imports hold firm.China’s September base oils imports fall.Singapore’s Sept base oils exports rise.Asia base oils demand outlook: Week of 21 Oct
