· Europe’s Group II base oils prices rise vs prices in US and Asia in March 2025..· Europe’s Group I brightstock price rises vs prices in US and Asia in March 2025..· Outperformance of Europe base oils prices vs prices in US and Asia points to firmer supply-demand fundamentals in Europe than in those other markets..· Lube demand in some of Europe's key markets shows signs of steadying in early 2025 after contracting through most of last year..· Steady-to-weak lube demand contrasts with rising lube consumption and tighter surplus base oils supply in Asia at end-2024 and early this year..· Asia’s supply-tightness could ease in Q2 2025 following peak-demand in month of March and following planned completion of some major plant maintenance work in April 2025..· Seasonal rise in lube demand in Asia also typically peaks earlier than in Europe.· Europe’s lube demand could get additional support from expectations of pick-up in economic activity in markets like Germany.· Germany’s economic sentiment rises in March 2025 to highest since Jan 2023, according to latest ZEW survey..· Europe’s Group I base oils supply already ends 2024 with smaller-than-usual surplus.· Europe’s Group I base oils exports to markets outside the region surge in Jan 2025 to highest in almost two years..· Rise in shipments limits build-up of Group I supply in Europe during winter months.· Rise in shipments includes pick-up in flows bound for southeast Asia..· Exports of large volumes to southeast Asia already become more frequenty throughout 2024. · Any additional shipments of Group I brightstock from Europe to southeast Asia would ease supply tightness of the product in that region.· Any such additional shipments would simultaneously compound supply tightness in Europe..· Any additional shipments of Group II base oils from Europe to markets like southeast Asia would also cushion impact of higher Group II production in Europe early this year vs H1 2024.· Europe’s Group II base oils supply also faces more exposure than other base oils grades to any tariff-related issues with US.· US base oils exports to Europe account for close to 40% of region’s Group II base oils supply in 2024..· Europe’s widening Group II base oils price premium to US export prices could reflect concern about any such supply disruptions.· Europe’s widening Group II base oils price premium to US export prices could instead reflect weaker-than-expected supply-demand fundamentals in US.· Either way, recent strength of Europe’s base oils prices relative to other regions points to adjustment in global supply-demand fundamentals that are likely to become clearer over the coming months..Global base oils margins outlook: Week of 24 March.Asia base oils demand outlook: Week of 24 March.Asia base oils supply outlook: Week of 24 March.Asia's January lube demand rises
