Thailand’s lube demand fell for a sixth month in August, contrasting with improving base oils supply in southeast Asia.Signs of weaker consumption in other southeast Asian markets like the Philippines raised the prospect of magnifying the disconnect between supply and demand. The disconnect contrasted with firmer lube consumption in southeast Asia during the first half of the year, combined with tighter base oils supply in the Asia-Pacific region.Any extension of the contraction in demand in markets like Thailand would now coincide with an expected pick-up in Asia’s base oils supply.Most plant-maintenance in the region has now been completed, while new production capacity is starting to come online.Thailand’s lube consumption fell to less than 30,000 kilolitres (26,000 tonnes) in August, government data showed..The volume fell by 11% from year-earlier levels to the lowest since April 2020, when pandemic-related restrictions slashed economic activity in the country.Lube consumption fell this time against the backdrop of shrinking industrial production, weaker private consumption and political instability.Sliding lube consumption contrasted with a sustained rise in Thailand’s base oils imports that extended into the third quarter of the year.The disconnect pointed to domestic blenders’ rising consumption of premium-grade base oils in place of Group I supplies in their lubricants formulations.The size of the disconnect pointed to a rise in blenders’ base oils stocks..The larger disconnect showed signs of extending beyond Thailand to the rest of southeast Asia.Asia’s base oils exports to the region rose to a thirteen-month high in August and outpaced southeast Asia’s lube demand by the largest volume in more than a year.The dynamic raised the prospect of leaving the region’s blenders with healthy stocks at the end of the third quarter of the year.Healthy inventories, concern about weak demand and the start-up of Singapore’s new Group II base oils unit in September incentivized blenders to manage their procurement plans increasingly carefully.Weaker demand in southeast Asia in turn raised the prospect of more base oils supplies targeting markets beyond the Asia-Pacific region..Thailand’s July lube demand slumps.ExxonMobil ships Group II base stocks from new Singapore units.S Korea's August base oils output rises.Base Oil News stories and analysis also available on ICIS platform
