· Asia’s base oils demand could fall in face of slumping crude oil prices and concern about slower-than-expected economic growth in the region.· Concern about weaker demand cuts fundamentals-related support that could cushion against impact of falling crude oil prices.· Concern about more muted demand and expected improvement in base oils supply in coming weeks would contrast with increasingly high base oils margins caused by lower crude oil prices.· Concern about growing divergence between market fundamentals and base oils margins raises expectations of subsequent price adjustments.· Concern about demand and price volatility incentivize buyers to hold back and maintain lower stocks.· Market volatility and uncertainty could prompt buyers to rely on and minimize term volumes until clarity improves over impact of recent market developments. · Any signs of more protracted slowdown in Asia’s economic growth relative to other regions could trigger pick-up in buying interest in those other regions for supplies from Asia..· China’s base oils demand could turn even more cautious, with any additional buying interest mostly to cover for ongoing round of domestic plant maintenance.· China’s domestic base oils price turn increasingly mixed versus FOB Asia cargo prices.· China’s domestic Group II N500 premium weakens versus FOB Asia prices, domestic N150 premium rises, and Group I brightstock premium holds firm..· Narrowing Group II N500 premium points to more muted interest in securing additional supplies even with ongoing domestic plant maintenance work..· Singapore base oils exports to China hold firm over last four weeks even as its total exports fall..· Firm export volumes to China could reflect demand for supplies to cover for lower domestic production during round of plant maintenance work.· Singapore’s base oils exports to southeast Asia fall back to more typical levels over last four weeks.· Slowdown in shipments coincides with signs of fall in exports from Taiwan to southeast Asia in March 2025, as well as ongoing plant maintenance in South Korea.· Slowdown in shipments follows seasonal rise in regional demand in March 2025, leaving blenders with depleted stocks.· Slowdown in shipments could reflect blenders’ preference to replenish stocks more slowly.· Imposition of US tariffs on imports from Asia could add to blenders’ preference to maintain lower stocks..· Any such slowdown in buying interest could slow or reverse signs of firmer lube consumption in southeast Asia in recent months.· Thailand’s lube demand rises in Feb 2025 for third month, reflecting that trend..· Strong overseas demand for Thailand’s base oils supplies lifts country’s total demand close to six-month high in Feb 2025.· Concern about economic slowdown could trigger reversal of recent recovery in lube demand in markets like Thailand.· Overseas demand for Thailand’s base oils could get ongoing support amid tighter availability from other key sources like Japan.· Demand could get further boost ahead of overlapping plant maintenance in Japan and Thailand in coming months.· Concern about economic slowdown throughout Asia could instead overshadow structurally tighter supply and curb overseas demand..· Japan’s base oils/lube demand falls in Jan-Feb 2025 even before imposition of US tariffs..· Weaker demand cushions impact of country’s lower base oils output.· Weaker demand mirrors slowdown in consumption in South Korea in first two months of 2025, as well as slower demand in China.· Weaker demand in northeast Asia coincides with growing concern about US tariffs and their impact on Asia’s economic growth even before their implementation.· Any extension of demand weakness could cushion impact of Asia’s tighter supply because of widespread round of plant maintenance..· India’s base oils demand could dip as buyers hold back until crude prices stabilize.· Buyers could then target more competitive prices that compensate for market volatility and uncertainty about demand outlook.· Any pick-up in surplus supply because of weaker demand would add to buyers’ leverage.· CFR India Group II N500 price strengthens vs FOB Asia, vs FOB US Gulf coast and vs CFR NE Asia prices in early-April 2025.. · Outperformance of CFR India N500 price points to sustained buying interest in the heavy-grade product..Thailand’s February lube demand rises.Japan’s February base oils output falls.Asia base oils demand outlook: Week of 31 March
