· Asia’s base oils demand likely to get support from seasonal rise in lube demand, signs of more limited supply surplus.· Unusually firm base oils margins for time of year could incentivize buyers to maintain lower stocks to limit exposure to any price adjustment.· Signs of limited supply-surplus and ongoing/upcoming plant shutdowns could curb such concerns, prompting buyers to build sufficient stocks to cover for seasonal pick-up in demand.· Group II heavy-grade prices stay unusually firm vs light grades in Asia and China markets..· Sustained strength of Group II heavy neutrals points to increasingly firm demand fundamentals for the grade.· China’s base oils prices hold unusually firm vs domestic diesel prices for the time of year, pointing to more balanced supply-demand fundamentals, especially vs year-earlier levels.· China’s base oils demand for overseas supplies could get support as widening gap between Group II domestic prices and FOB Asia prices makes arbitrage more feasible..· China’s demand for Group I base oils from regional sources could get a boost in the coming months amid prospect of permanent closure of a key Group I base oils unit in the country..· Singapore’s base oils exports to southeast Asia stay high in four weeks to end-Aug 2024, contrasting with slowdown in shipments to India and China..· Exports to southeast Asia stay high even after surge in Asia-Pacific shipments to the region in July 2024.· Still-high shipments to the region point either to firm demand compared with India and China, or to rise in stocks..· Singapore’s average bunker fuel sales per vessel rises in July 2024 for eighth straight month year on year..· Higher-than-usual bunker fuel sales and sales per vessel point to higher-than-usual marine lube consumption.· Higher-than-usual marine lube demand points to higher-than-usual consumption of Group I brightstock, a key component of marine lubricants..· Japan’s base oils/lube demand rises in July 2024 for third time in four months from year-earlier levels..· Signs of firmer consumption in northeast Asia in July 2024 cushion impact of higher supply, slowing build-up of surplus volumes..· India’s base oils demand outpaces supply in July 2024 for fifth month and by largest volume in more than four years..· Persistent supply-shortfall likely cut blenders’ stocks, curbing impact of seasonal slowdown in lube consumption in month of August.· Supply-shortfall likely to support firm demand for replenishment supplies, especially of light grades.· Recovery in CFR India Group II light-grade base oil premium to FOB NE Asia prices points to such a dynamic.· India light-grade premium to FOB NE Asia prices holds at highest since April 2024..· Closed arbitrage from US to India and ongoing/upcoming plant maintenance in Asia could add to buying interest for replenishment supplies.· Plant maintenance in Asia could support stronger buying interest in supplies from Saudi Arabia..· Demand for heavy grades could be lower after surge in India’s imports of the product in July 2024 replenished blenders’ stocks, curbing urgency to seek additional volumes.· CFR India Group II heavy-grade price stays at unusual discount to FOB NE Asia prices for second week, pointing to weaker demand fundamentals..Japan’s July base oils supply stays lower.India’s July base oils supply lags demand.Asia base oils demand outlook: Week of 26 Aug
· Asia’s base oils demand likely to get support from seasonal rise in lube demand, signs of more limited supply surplus.· Unusually firm base oils margins for time of year could incentivize buyers to maintain lower stocks to limit exposure to any price adjustment.· Signs of limited supply-surplus and ongoing/upcoming plant shutdowns could curb such concerns, prompting buyers to build sufficient stocks to cover for seasonal pick-up in demand.· Group II heavy-grade prices stay unusually firm vs light grades in Asia and China markets..· Sustained strength of Group II heavy neutrals points to increasingly firm demand fundamentals for the grade.· China’s base oils prices hold unusually firm vs domestic diesel prices for the time of year, pointing to more balanced supply-demand fundamentals, especially vs year-earlier levels.· China’s base oils demand for overseas supplies could get support as widening gap between Group II domestic prices and FOB Asia prices makes arbitrage more feasible..· China’s demand for Group I base oils from regional sources could get a boost in the coming months amid prospect of permanent closure of a key Group I base oils unit in the country..· Singapore’s base oils exports to southeast Asia stay high in four weeks to end-Aug 2024, contrasting with slowdown in shipments to India and China..· Exports to southeast Asia stay high even after surge in Asia-Pacific shipments to the region in July 2024.· Still-high shipments to the region point either to firm demand compared with India and China, or to rise in stocks..· Singapore’s average bunker fuel sales per vessel rises in July 2024 for eighth straight month year on year..· Higher-than-usual bunker fuel sales and sales per vessel point to higher-than-usual marine lube consumption.· Higher-than-usual marine lube demand points to higher-than-usual consumption of Group I brightstock, a key component of marine lubricants..· Japan’s base oils/lube demand rises in July 2024 for third time in four months from year-earlier levels..· Signs of firmer consumption in northeast Asia in July 2024 cushion impact of higher supply, slowing build-up of surplus volumes..· India’s base oils demand outpaces supply in July 2024 for fifth month and by largest volume in more than four years..· Persistent supply-shortfall likely cut blenders’ stocks, curbing impact of seasonal slowdown in lube consumption in month of August.· Supply-shortfall likely to support firm demand for replenishment supplies, especially of light grades.· Recovery in CFR India Group II light-grade base oil premium to FOB NE Asia prices points to such a dynamic.· India light-grade premium to FOB NE Asia prices holds at highest since April 2024..· Closed arbitrage from US to India and ongoing/upcoming plant maintenance in Asia could add to buying interest for replenishment supplies.· Plant maintenance in Asia could support stronger buying interest in supplies from Saudi Arabia..· Demand for heavy grades could be lower after surge in India’s imports of the product in July 2024 replenished blenders’ stocks, curbing urgency to seek additional volumes.· CFR India Group II heavy-grade price stays at unusual discount to FOB NE Asia prices for second week, pointing to weaker demand fundamentals..Japan’s July base oils supply stays lower.India’s July base oils supply lags demand.Asia base oils demand outlook: Week of 26 Aug
