· Asia’s base oils demand faces contrasting signals that could prompt moves to delay stock replenishment plans.· Regional lube demand set for seasonal pick at end-Q3 2024 and start of Q4 2024..· Buyers would need to lock in supplies soon to cover seasonal pick-up in demand at end-Q3 2024.· Slower consumption of their existing stocks would curb urgency to lock in replenishment supplies.· Buyers’ stocks in some markets show signs of falling faster than others.· Lower crude oil prices and expectations of healthy availability of supply incentivize buyers to hold back in anticipation of base oils price adjustments to reflect those dynamics.· Rise in demand at end-Q3 2024 likely to coincide with scheduled plant maintenance work in South Korea.· Rise in demand could coincide with firm buying interest from Americas if that region faces supply disruptions over the coming weeks.· Rise in demand could coincide with pick-up in availability of supplies from Americas if that region avoids supply disruptions..· Asia’s Group II heavy-grade price premium to light grades extends rise to highest since end-2021..· Rising Group II heavy-grade premium to light grades, firm Group I heavy-grade premium to light-neutrals and firm heavy-grade premium to gasoil points to strong fundamentals for heavy grades..· China’s base oils demand would need to pick-up in Q3 2024 to absorb rise in supply at end-Q2 2024.· China’s domestic Group II price premium to FOB NE Asia cargo prices resumes steady rise that began at end-May 2024..· Premium continues to widen even after rise in China’s base oils supply in June 2024.· Rising premium suggests any pressure from surplus supply remains limited.· Rise in China’s June supply, more feasible arbitrage to China and limited downward price-pressure point to signs of firmer demand than previously.· China’s domestic Group II heavy-grade premium to light grades extends rise to highest in more than two years.· Widening premium points to even stronger fundamentals for Group II heavy grades.· Outlier is brightstock.· China’s domestic Group I brightstock premium to FOB Asia prices extends drop to lowest since Nov 2023, although it remains well above year-earlier levels..· Singapore’s base oils exports to China rebound in July 2024..· Rise in shipments and China's still-rising domestic price premium to FOB Asia prices adds to signs that surplus supply remains manageable for most grades..· Singapore’s base oils exports to southeast Asia hold relatively firm in June 2024, contrasting with fall in shipments to China and India..· Firm shipments point to steadier demand in southeast Asia compared with China and India.· Firm shipments highlight the reliance of key markets in southeast Asia on supplies from sources like Singapore.· Trend contrasts with China’s shrinking requirements for overseas supplies and the prospect of a similar scenario in India over the coming year..· India’s CFR Group II price premium to FOB NE Asia prices stays narrow.· Narrow premium points to still-muted demand, suggests buyers have sufficient stocks or expect prices to adjust lower and supply to remain readily available.· Muted demand curbs impact of slowdown in arbitrage shipments from US to India over coming months.· India’s imports in July 2024 shows signs of getting boost from pick-up in supplies from Singapore, Taiwan, and Saudi Arabia, as well as additional flows from Turkmenistan.· Imports from Saudi Arabia mostly reflect arrival of cargo in H1 July 2024 that loaded in June 2024.· Imports from Saudi Arabia could fall in Aug 2024, with no cargoes loaded from the country in July 2024 bound for India..Global base oils arb outlook: Week of 22 July.Asia’s lube demand set to revive from end-Q3 2024.Asia base oils demand outlook: Week of 15 July
· Asia’s base oils demand faces contrasting signals that could prompt moves to delay stock replenishment plans.· Regional lube demand set for seasonal pick at end-Q3 2024 and start of Q4 2024..· Buyers would need to lock in supplies soon to cover seasonal pick-up in demand at end-Q3 2024.· Slower consumption of their existing stocks would curb urgency to lock in replenishment supplies.· Buyers’ stocks in some markets show signs of falling faster than others.· Lower crude oil prices and expectations of healthy availability of supply incentivize buyers to hold back in anticipation of base oils price adjustments to reflect those dynamics.· Rise in demand at end-Q3 2024 likely to coincide with scheduled plant maintenance work in South Korea.· Rise in demand could coincide with firm buying interest from Americas if that region faces supply disruptions over the coming weeks.· Rise in demand could coincide with pick-up in availability of supplies from Americas if that region avoids supply disruptions..· Asia’s Group II heavy-grade price premium to light grades extends rise to highest since end-2021..· Rising Group II heavy-grade premium to light grades, firm Group I heavy-grade premium to light-neutrals and firm heavy-grade premium to gasoil points to strong fundamentals for heavy grades..· China’s base oils demand would need to pick-up in Q3 2024 to absorb rise in supply at end-Q2 2024.· China’s domestic Group II price premium to FOB NE Asia cargo prices resumes steady rise that began at end-May 2024..· Premium continues to widen even after rise in China’s base oils supply in June 2024.· Rising premium suggests any pressure from surplus supply remains limited.· Rise in China’s June supply, more feasible arbitrage to China and limited downward price-pressure point to signs of firmer demand than previously.· China’s domestic Group II heavy-grade premium to light grades extends rise to highest in more than two years.· Widening premium points to even stronger fundamentals for Group II heavy grades.· Outlier is brightstock.· China’s domestic Group I brightstock premium to FOB Asia prices extends drop to lowest since Nov 2023, although it remains well above year-earlier levels..· Singapore’s base oils exports to China rebound in July 2024..· Rise in shipments and China's still-rising domestic price premium to FOB Asia prices adds to signs that surplus supply remains manageable for most grades..· Singapore’s base oils exports to southeast Asia hold relatively firm in June 2024, contrasting with fall in shipments to China and India..· Firm shipments point to steadier demand in southeast Asia compared with China and India.· Firm shipments highlight the reliance of key markets in southeast Asia on supplies from sources like Singapore.· Trend contrasts with China’s shrinking requirements for overseas supplies and the prospect of a similar scenario in India over the coming year..· India’s CFR Group II price premium to FOB NE Asia prices stays narrow.· Narrow premium points to still-muted demand, suggests buyers have sufficient stocks or expect prices to adjust lower and supply to remain readily available.· Muted demand curbs impact of slowdown in arbitrage shipments from US to India over coming months.· India’s imports in July 2024 shows signs of getting boost from pick-up in supplies from Singapore, Taiwan, and Saudi Arabia, as well as additional flows from Turkmenistan.· Imports from Saudi Arabia mostly reflect arrival of cargo in H1 July 2024 that loaded in June 2024.· Imports from Saudi Arabia could fall in Aug 2024, with no cargoes loaded from the country in July 2024 bound for India..Global base oils arb outlook: Week of 22 July.Asia’s lube demand set to revive from end-Q3 2024.Asia base oils demand outlook: Week of 15 July