· US domestic Group I SN 500 price rises to premium to Group II N600 price in May 2025 for first time in more than four years..· In Middle East, CFR UAE Group I SN 500 price discount to Group II N500 shrinks to narrowest in more than seven months..· In Asia, FOB Asia Group I SN 500 price strengthens vs Group II N500 in May 2025 to firmest level in six months.· Group I SN 500 prices show similar strength in other markets like China and India.· Simultaneous rise in Group I SN 500 price vs Group II heavy grades points to stronger demand, or tighter supply, or weaker Group II heavy-grade prices, or combination of all those factors.· In US, steady outright Group I SN 500 price contrasts with sliding Group II N600 price amid persistent surplus availability of Group II heavy grades..· Trend suggests Group II price-weakness is key factor supporting firmer Group I SN 500 price differentials..· In other markets like UAE and India, Group II price-strength is key factor supporting firmer Group I SN 500 price differentials.· In India, CFR India Group II N500 price premium to Group I SN 500 rises in April 2025 to highest since 2021..· Widening Group II premium over Group I incentivized buyers to use more Group I supplies as alternative where formulations allow.· Rise in demand for Group I heavy neutrals contrasts with tighter supply in Q2 2025 because of domestic and regional plant maintenance work.· India's imports of Group I heavy-neutrals dip to four-month low in April 2025..· Lower imports coincide with shutdown of Group I plant in Iran for scheduled maintenance work.· Lower imports complicate buyers’ moves to procure more Group I base oils in place of Group II supplies..· In Asia, signs of improving availability of Group II heavy-grade supply is key factor supporting firmer Group I SN 500 differentials.· South Korea’s base oils output dips to twenty-one-month low in March 2025 because of Group II plant-maintenance work.· Output partially recovers in April 2025 following completion of maintenance work in H2 April 2025..· Extension of recovery in Group II output over following months would put onus on refiners to adjust prices to attract sufficient demand to absorb the higher supplies..· In US, Group I SN 500 price-strength reflects more the impact of oversupply of Group II heavy grades.· In other markets, Group I SN 500 price-strength reflects more the impact of tight supply and high prices for Group II base oils, triggering demand for alternatives to Group II.· Group I SN 500 prices could extend their recent recovery versus Group II base oils. · Even so, that recovery is reliant more on Group II base oils than on a structural rise in demand for Group I base oils..Global base oils margins outlook: Week of 2 June.Asia base oils demand outlook: Week of 2 June.Asia base oils supply outlook: Week of 2 June
