· Asia’s Group II base oils prices hold firm relative to prices in regional markets like northeast Asia so far this year..· Asia’s Group II base oils prices hold firm relative to prices in more distant markets like Americas so far this year..· Asia’s firm prices complicate arbitrage, reflecting tighter-than-usual regional supply late last year and in early-2025.· Supply-demand balance stays tight amid heavy round of plant maintenance and strong lube consumption in Q1 2025..· Supply-demand balance likely to improve in Q2 2025, with large portion of plant maintenance set to end in April-May 2025.· Supply set to get additional boost from start-up of new production capacity in Asia in coming months.· Asia’s lube demand also likely to ease vs Q1 2025, with seasonal slowdown gathering pace from end-Q2 2025..· Demand could face additional pressure from recent volatility of crude oil prices, incentivizing blenders to keep lower inventories.· Concern about impact of US tariffs on Asia’s economic growth prospects could add to blenders’ preference to maintain lower stocks..· Improving supply and weaker demand could trigger rise in surplus base oils volumes.· Refiners could trim run-rates to limit any such rise in surplus volumes.· High base oils margins cut incentive for refiners to trim run-rates for now..· Refiners could instead move surplus volumes to other markets.· Any such move would require Asia’s base oils prices adjust to levels that make more feasible the arbitrage to markets like Middle East and Americas.· Any such move would require that Asia prices weaken relative to prices in those destination markets, even if outright prices continued to trend higher.· Any need to clear surplus volumes, and delays over moves to clear the shipments, could alternatively trigger a more rapid build-up of supplies.· Any such more rapid build-up would in turn require clear-out of larger volumes and prices that facilitated removal of the larger volumes.· Recent weakness of Asia’s Group II prices vs prices in markets like US and Europe suggests moves to facilitate arbitrage flows may have already begun..Global base oils margins outlook: Week of 21 April.Asia base oils supply outlook: Week of 21 April.Asia base oils demand outlook: Week of 21 April
· Asia’s Group II base oils prices hold firm relative to prices in regional markets like northeast Asia so far this year..· Asia’s Group II base oils prices hold firm relative to prices in more distant markets like Americas so far this year..· Asia’s firm prices complicate arbitrage, reflecting tighter-than-usual regional supply late last year and in early-2025.· Supply-demand balance stays tight amid heavy round of plant maintenance and strong lube consumption in Q1 2025..· Supply-demand balance likely to improve in Q2 2025, with large portion of plant maintenance set to end in April-May 2025.· Supply set to get additional boost from start-up of new production capacity in Asia in coming months.· Asia’s lube demand also likely to ease vs Q1 2025, with seasonal slowdown gathering pace from end-Q2 2025..· Demand could face additional pressure from recent volatility of crude oil prices, incentivizing blenders to keep lower inventories.· Concern about impact of US tariffs on Asia’s economic growth prospects could add to blenders’ preference to maintain lower stocks..· Improving supply and weaker demand could trigger rise in surplus base oils volumes.· Refiners could trim run-rates to limit any such rise in surplus volumes.· High base oils margins cut incentive for refiners to trim run-rates for now..· Refiners could instead move surplus volumes to other markets.· Any such move would require Asia’s base oils prices adjust to levels that make more feasible the arbitrage to markets like Middle East and Americas.· Any such move would require that Asia prices weaken relative to prices in those destination markets, even if outright prices continued to trend higher.· Any need to clear surplus volumes, and delays over moves to clear the shipments, could alternatively trigger a more rapid build-up of supplies.· Any such more rapid build-up would in turn require clear-out of larger volumes and prices that facilitated removal of the larger volumes.· Recent weakness of Asia’s Group II prices vs prices in markets like US and Europe suggests moves to facilitate arbitrage flows may have already begun..Global base oils margins outlook: Week of 21 April.Asia base oils supply outlook: Week of 21 April.Asia base oils demand outlook: Week of 21 April
