· Asia’s base oils demand could be more muted as sliding crude oil prices raise concern about exposure to drop in base oil prices.· Lube demand in markets like China and India faces seasonal pick-up in coming weeks, irrespective of crude oil prices.· Combination of firmer end-user consumption, balanced-to-tighter supplies and sliding crude prices complicate buyers’ procurement plans.· Balanced fundamentals could prompt buyers to secure sufficient volumes while avoiding stock-build..· Asia’s lube demand likely to see seasonal recovery in Sept 2024 from previous month, followed by slowdown that bottoms out in Dec 2024..· Lube demand could lag steeper drop in Asia’s base oils output this and next month, tightening surplus availability of supply.· Smaller surplus could limit pressure on refiners to adjust prices to clear the volumes.· Smaller surplus could support firmer demand for the more limited volumes.· Smaller surplus could support firmer demand for supplies from more distant markets, especially if prices in those markets become more competitive. .· China’s base oils demand shows signs of improving as Group I/II price premium mostly rises relative to diesel and to regional prices even as domestic supply rises in Aug 2024.· China’s domestic Group II light-grade premium to FOB NE Asia prices extends rise to highest since end-Jan 2024..· More feasible Group II arbitrage coincides with strong rise in China’s Group III base oils output in recent months, contrasting with lower Group II output. · China’s domestic Group I light/heavy-neutrals price premium to FOB Asia prices rebounds in Sept 2024; heavy-neutrals premium climbs to highest in more than a year.· Group I premium rebounds ahead of closure of major Group I unit in China in Oct 2024.· Rising premium suggests that plant closure could trigger more demand for Group I supplies from Asia-Pacific region.· Any stronger-than-expected pick-up in demand from China could trim further the region’s supply surplus..· Thailand’s lube consumption extends rise in July 2024..· Rising consumption boosts signs of ongoing-demand growth in southeast Asia.· Demand in southeast Asia needs to stay strong to absorb the swathe of shipments that moved to the region early in Q3 2024.· Firm demand in southeast Asia also provides Singapore and South Korea with crucial and growing outlet for their base oils supplies..· Indonesia’s July base oils imports rise in July 2024 for fourth month in five from year-earlier levels..· Rise in shipments to southeast Asia’s largest importer supports sustained rise in shipments from Singapore and South Korea to the region so far this year.· Any slowdown in Indonesia’s base oils imports would be a drag on regional demand, highlighting importance for suppliers to develop other outlets..· Singapore’s base oils exports to southeast Asia dip over past four weeks as slowdown in shipments to Indonesia extends to other markets like Thailand and Malaysia..· Slowdown could reflect regional blenders’ healthy stocks after surge in Asia’s exports to southeast Asia earlier in Q3 2024..· Pakistan’s Group II heavy-grade base oils imports account for more than 60% of country's total imports in July 2024 for third month..· Group II heavy-grade’s large and rising share of imports contrasts with markets like India, where Group II heavy grades account for around 10-15% of total imports.· Large share magnifies importance of Pakistan as key outlet for overseas suppliers of Group II heavy grades.· Sustained pick-up in Pakistan’s Group II heavy-grade imports from US in three months to July 2024 point to rising competition for the market. .· India’s base oils demand could get support from signs of firmer-than-expected consumption and lower-than-expected stocks in Q3 2024.· India’s CFR Group II N150 premium to FOB NE Asia prices holds firm at highest since early Q2 2024..· Wider premium supports signs of tighter-than-expected supply-demand fundamentals.· Buyers’ inventories could be lower than usual after demand exceeded supply in July 2024 for fifth month.· India’s imports show signs of staying lower and demand firmer in Aug 2024.· Drop in crude oil prices complicates buyers’ procurement plans at a time when lube consumption faces seasonal pick-up in the coming months.· Any delays to moves to lock in supplies would coincide with likely slowdown in shipments from South Korea because of plant maintenance work.· Firm CFR India light-grade premium to FOB NE Asia prices contrasts with increasingly steep CFR India N500 discount to FOB NE Asia price.· Price discount keeps arbitrage shut, suggests buyers’ supplies of heavy neutrals remain sufficient for now..Asia’s lube demand set to slow in Q4 .Pakistan July base oil supply holds firm.Indonesia’s July base oils imports rise
· Asia’s base oils demand could be more muted as sliding crude oil prices raise concern about exposure to drop in base oil prices.· Lube demand in markets like China and India faces seasonal pick-up in coming weeks, irrespective of crude oil prices.· Combination of firmer end-user consumption, balanced-to-tighter supplies and sliding crude prices complicate buyers’ procurement plans.· Balanced fundamentals could prompt buyers to secure sufficient volumes while avoiding stock-build..· Asia’s lube demand likely to see seasonal recovery in Sept 2024 from previous month, followed by slowdown that bottoms out in Dec 2024..· Lube demand could lag steeper drop in Asia’s base oils output this and next month, tightening surplus availability of supply.· Smaller surplus could limit pressure on refiners to adjust prices to clear the volumes.· Smaller surplus could support firmer demand for the more limited volumes.· Smaller surplus could support firmer demand for supplies from more distant markets, especially if prices in those markets become more competitive. .· China’s base oils demand shows signs of improving as Group I/II price premium mostly rises relative to diesel and to regional prices even as domestic supply rises in Aug 2024.· China’s domestic Group II light-grade premium to FOB NE Asia prices extends rise to highest since end-Jan 2024..· More feasible Group II arbitrage coincides with strong rise in China’s Group III base oils output in recent months, contrasting with lower Group II output. · China’s domestic Group I light/heavy-neutrals price premium to FOB Asia prices rebounds in Sept 2024; heavy-neutrals premium climbs to highest in more than a year.· Group I premium rebounds ahead of closure of major Group I unit in China in Oct 2024.· Rising premium suggests that plant closure could trigger more demand for Group I supplies from Asia-Pacific region.· Any stronger-than-expected pick-up in demand from China could trim further the region’s supply surplus..· Thailand’s lube consumption extends rise in July 2024..· Rising consumption boosts signs of ongoing-demand growth in southeast Asia.· Demand in southeast Asia needs to stay strong to absorb the swathe of shipments that moved to the region early in Q3 2024.· Firm demand in southeast Asia also provides Singapore and South Korea with crucial and growing outlet for their base oils supplies..· Indonesia’s July base oils imports rise in July 2024 for fourth month in five from year-earlier levels..· Rise in shipments to southeast Asia’s largest importer supports sustained rise in shipments from Singapore and South Korea to the region so far this year.· Any slowdown in Indonesia’s base oils imports would be a drag on regional demand, highlighting importance for suppliers to develop other outlets..· Singapore’s base oils exports to southeast Asia dip over past four weeks as slowdown in shipments to Indonesia extends to other markets like Thailand and Malaysia..· Slowdown could reflect regional blenders’ healthy stocks after surge in Asia’s exports to southeast Asia earlier in Q3 2024..· Pakistan’s Group II heavy-grade base oils imports account for more than 60% of country's total imports in July 2024 for third month..· Group II heavy-grade’s large and rising share of imports contrasts with markets like India, where Group II heavy grades account for around 10-15% of total imports.· Large share magnifies importance of Pakistan as key outlet for overseas suppliers of Group II heavy grades.· Sustained pick-up in Pakistan’s Group II heavy-grade imports from US in three months to July 2024 point to rising competition for the market. .· India’s base oils demand could get support from signs of firmer-than-expected consumption and lower-than-expected stocks in Q3 2024.· India’s CFR Group II N150 premium to FOB NE Asia prices holds firm at highest since early Q2 2024..· Wider premium supports signs of tighter-than-expected supply-demand fundamentals.· Buyers’ inventories could be lower than usual after demand exceeded supply in July 2024 for fifth month.· India’s imports show signs of staying lower and demand firmer in Aug 2024.· Drop in crude oil prices complicates buyers’ procurement plans at a time when lube consumption faces seasonal pick-up in the coming months.· Any delays to moves to lock in supplies would coincide with likely slowdown in shipments from South Korea because of plant maintenance work.· Firm CFR India light-grade premium to FOB NE Asia prices contrasts with increasingly steep CFR India N500 discount to FOB NE Asia price.· Price discount keeps arbitrage shut, suggests buyers’ supplies of heavy neutrals remain sufficient for now..Asia’s lube demand set to slow in Q4 .Pakistan July base oil supply holds firm.Indonesia’s July base oils imports rise
