· Asia’s base oils demand could stay more cautious as high margins and falling prices in other markets sustain concern about downward price pressure.· Signs of steady-to-firm underlying lube consumption and limited surplus supply at end-Q3 likely to sustain regular procurement, even if blenders seek to maintain lower stocks..· Supply-demand dynamics for heavy-grade base oils especially show signs of staying strong.· Premium of FOB NE Asia Group II N500 over N150 extends rise to highest since Q4 2021..· Premium maintains sustained rise since start of 2024.· Relatively steady supply suggests demand is key driver behind rising premium..· China’s base oils imports rise in August 2024 from year-earlier levels for first time in seven months.· Rise in imports and firm domestic output extend rebound in China’s base oils supply..· Rising supply points either to rising stocks and subsequent slowdown in demand, or to demand that is firm enough to absorb the supplies.· China’s domestic base oils prices hold increasingly firm vs domestic diesel prices and vs FOB Asia prices throughout Q3 2024..· Firm base oils prices incentivize domestic and regional refiners to boost already-high supply for China's domestic market.· Rising supply and still-rising price differentials suggest that China’s demand may be stronger than expected..· Singapore’s four-week base oils exports to China hold steady, contrasting with rise in shipments to southeast Asia and especially India..· Singapore's base oils exports recover in recent weeks after fall in total exports and in shipments to key outlets in Aug 2024..· Slowdown in Singapore's exports in Aug 2024 includes to Indonesia, but shipments rise to other markets in southeast Asia..· Singapore's exports to Indonesia shows signs of improving in Sept 2024, while shipments to rest of southeast Asia see slowdown.· Trend points to steady demand throughout the region..· Vietnam’s base oils imports rise to fifteen-month high in Aug 2024..· Rise in shipments follows and likely partly reflects surge in Asia’s base oil exports to southeast Asia in July 2024.· Surge in shipments to the region could curb subsequent pace of demand as buyers first consume existing stocks.· South Korea’s share of Vietnam’s base oils imports continues to outpace Singapore’s share in Aug 2024 and in Jan-Aug 2024..· Singapore was previously the largest source of Vietnam’s imports in each of the previous four years..· Pick-up in Singapore’s shipments to India in recent weeks points to steady demand in that market, after India's base oils supply lags demand for sixth month in Aug 2024..· Wider shortfall leaves blenders with lower stocks ahead of seasonal rise in demand from end-Q3 2024.· Wider shortfall curbs blenders’ leverage to hold off locking in more supplies even if there is a preference to hold back in anticipation of improving supply and lower prices.· Dynamic could prompt buyers to procure smaller volumes more frequently in order to sustain sufficient stocks, as they wait for overseas supplies to rise.· India’s imported Group II N150 premium to FOB NE Asia price extends rise at end-Sept 2024 to widest in more than five months..· Widening premium makes arbitrage more feasible, points to ongoing buying interest even amid expectations of lower outright prices.· Any significant pick-up in supplies from the US is unlikely to see shipments reach India until year-end or early next year.· Any significant pick-up in supplies remains unlikely for now, with arbitrage from US still hard to work; US prices maintain steep premium to CFR India prices even after recent fall in outright US prices.· Possibility of more feasible arbitrage only later in the year would leave Indian buyers facing prospect of tighter supply in Q4 2024 because of maintenance work on a base oils unit in South Korea..· India’s domestic diesel premium to imported Group II N70 price rises in Sept 2024 to highest in more than two years..· Rising domestic diesel premium to CFR India N70 price often triggers rise in demand for very-light grade base oils..China’s August base oils imports rise.India’s Aug base oils supply lags demand.Asia base oils demand outlook: Week of 23 Sept
· Asia’s base oils demand could stay more cautious as high margins and falling prices in other markets sustain concern about downward price pressure.· Signs of steady-to-firm underlying lube consumption and limited surplus supply at end-Q3 likely to sustain regular procurement, even if blenders seek to maintain lower stocks..· Supply-demand dynamics for heavy-grade base oils especially show signs of staying strong.· Premium of FOB NE Asia Group II N500 over N150 extends rise to highest since Q4 2021..· Premium maintains sustained rise since start of 2024.· Relatively steady supply suggests demand is key driver behind rising premium..· China’s base oils imports rise in August 2024 from year-earlier levels for first time in seven months.· Rise in imports and firm domestic output extend rebound in China’s base oils supply..· Rising supply points either to rising stocks and subsequent slowdown in demand, or to demand that is firm enough to absorb the supplies.· China’s domestic base oils prices hold increasingly firm vs domestic diesel prices and vs FOB Asia prices throughout Q3 2024..· Firm base oils prices incentivize domestic and regional refiners to boost already-high supply for China's domestic market.· Rising supply and still-rising price differentials suggest that China’s demand may be stronger than expected..· Singapore’s four-week base oils exports to China hold steady, contrasting with rise in shipments to southeast Asia and especially India..· Singapore's base oils exports recover in recent weeks after fall in total exports and in shipments to key outlets in Aug 2024..· Slowdown in Singapore's exports in Aug 2024 includes to Indonesia, but shipments rise to other markets in southeast Asia..· Singapore's exports to Indonesia shows signs of improving in Sept 2024, while shipments to rest of southeast Asia see slowdown.· Trend points to steady demand throughout the region..· Vietnam’s base oils imports rise to fifteen-month high in Aug 2024..· Rise in shipments follows and likely partly reflects surge in Asia’s base oil exports to southeast Asia in July 2024.· Surge in shipments to the region could curb subsequent pace of demand as buyers first consume existing stocks.· South Korea’s share of Vietnam’s base oils imports continues to outpace Singapore’s share in Aug 2024 and in Jan-Aug 2024..· Singapore was previously the largest source of Vietnam’s imports in each of the previous four years..· Pick-up in Singapore’s shipments to India in recent weeks points to steady demand in that market, after India's base oils supply lags demand for sixth month in Aug 2024..· Wider shortfall leaves blenders with lower stocks ahead of seasonal rise in demand from end-Q3 2024.· Wider shortfall curbs blenders’ leverage to hold off locking in more supplies even if there is a preference to hold back in anticipation of improving supply and lower prices.· Dynamic could prompt buyers to procure smaller volumes more frequently in order to sustain sufficient stocks, as they wait for overseas supplies to rise.· India’s imported Group II N150 premium to FOB NE Asia price extends rise at end-Sept 2024 to widest in more than five months..· Widening premium makes arbitrage more feasible, points to ongoing buying interest even amid expectations of lower outright prices.· Any significant pick-up in supplies from the US is unlikely to see shipments reach India until year-end or early next year.· Any significant pick-up in supplies remains unlikely for now, with arbitrage from US still hard to work; US prices maintain steep premium to CFR India prices even after recent fall in outright US prices.· Possibility of more feasible arbitrage only later in the year would leave Indian buyers facing prospect of tighter supply in Q4 2024 because of maintenance work on a base oils unit in South Korea..· India’s domestic diesel premium to imported Group II N70 price rises in Sept 2024 to highest in more than two years..· Rising domestic diesel premium to CFR India N70 price often triggers rise in demand for very-light grade base oils..China’s August base oils imports rise.India’s Aug base oils supply lags demand.Asia base oils demand outlook: Week of 23 Sept
