· Asia’s base oils demand could be more muted amid signs key regional buyers have secured sufficient volumes for now to cover seasonal pick-up in consumption.· Volatile crude oil prices and high base oils margins incentivize buyers to maintain lower inventories.· Signs of firm lube consumption in southeast Asia and India likely to require more frequent moves to replenish those inventories.· China’s base oils demand could be more muted, with buyers likely to have already secured supplies to cover seasonal rise in consumption at end-Q3/early Q4 2024.· Buyers likely to be wary of building larger stocks ahead of seasonal slowdown in demand during final months of Q4 2024 and early weeks of 2025..· Prospect of slowdown in demand contrasts with rise in China’s Group I/II light/heavy-neutrals prices relative to Shandong diesel prices and relative to FOB Asia prices..· Price-strength points to tight supply relative to demand, incentivizes domestic refiners to raise output and buyers to boost imports.· China’s Group I light/heavy-neutrals price-strength precedes closure of Group I plant in the country in Oct 2024.· China’s Group I price-strength fails to extend to brightstock, whose premium to FOB Asia prices extends sustained slide..· South Korea’s base oils exports to southeast Asia fall in Aug 2024 to lowest level this year, even as country's total exports surge..· Drop in exports in Aug 2024 follows surge in shipments from Asia-Pacific refiners to southeast Asia in July 2024.· Drop in exports in Aug 2024 could point to structural slowdown in demand in southeast Asia.· Drop in exports in Aug 2024 more likely suggests surge in shipments in July 2024 replenished blenders’ stocks, curbing immediate requirements for additional volumes..· Singapore’s bunker fuel sales per vessel stay higher than usual in Aug 2024, rise for ninth month from year-earlier levels..· Strong bunker fuel consumption per vessel likely supports similar rise in marine lube requirements, and demand for Group I brightstock to produce the lubricants..· Singapore’s base oils exports to India extend rise in four weeks to mid-Sept 2024; shipments to China and southeast Asia also rise..· Rise in shipments to India adds to signs of pick-up in country’s base oils imports in Sept 2024..· South Korea’s base oils exports to India rebound in Aug 2024..· Rise in shipments raises prospect of boosting India’s imports in Sept 2024.· Rise in imports from South Korea would coincide with signs of pick-up in shipments from Saudi Arabia to India in recent weeks.· Prospect of pick-up in imports in Sept 2024 coincides with pause in recovery of India’s CFR Group II N150 premium to FOB NE Asia price over past month.· Prospect of pick-up in imports, and pause in price-recovery, suggest buyers are now more comfortable with inventory levels. .· India’s imports of Group II heavy grades extend sustained rise in Aug 2024, contrasting with slowdown in shipments of light grades..· Rising Group II heavy-grade imports and dip in Group I heavy-neutrals shipments point to rise in consumption of Group II base oils in place of Group I.· Even with that pick-up in consumption, India’s imports of Group I/II heavy neutrals surge this year..· Surge in imports of heavy neutrals raises prospect of supply outpacing demand.· India’s CFR Group II N500 price stays unusually weak relative to FOB NE Asia prices since June 2024, reflecting such a dynamic..· India’s demand for Group II light grades could face further pressure if imports of Group III base oils stay high.· Healthy availability and competitive prices for some Group III supplies provide buyers with attraction alternative in place of Group II light grades.· India’s Group III 4cSt base oils imports account for unusually large share of country’s Group II/III light-grade imports in Aug 2024, reflecting signs of such moves to use more 4cSt supplies instead..· CFR India Group I brightstock premium to FOB Asia price extends surge to highest since early-2023.· India’s rising brightstock premium contrasts with sliding premium of China’s domestic brightstock price vs FOB Asia price..S Korea's Aug base oil exports to India rise.Asia base oils demand outlook: Week of 16 Sept
