·        Asia Group II heavy-neutrals prices rise versus light grades, versus Group I heavy-neutrals prices and versus other regions, ICIS data shows.

·        Firmer Asia prices contrast with weaker US Group II heavy-grade prices versus light grades and versus Group I heavy-neutrals base oils.

·        Firmer Asia prices contrast with weaker Europe Group II heavy-grade prices versus light grades and steady levels vs Group I prices.

·        Firmer prices point to tighter supply and stronger demand in Asia compared with other regions.

·        Asia’s Group II heavy-grade price reverts to premium to Group I SN 500 for first time since mid-November 2023.

·        Group II heavy-grade prices slipped to discount to SN 500 in late-2023 and early 2024 amid increasingly firm fundamentals for Group I heavy grades.

·        Asia’s Group I supply tightened from Q4 2023 in response to plant closure in Japan, plant maintenance in Thailand, limited exports from Europe to Asia, and logistical disruptions in Red Sea market.

·        Tighter Group I supply and higher prices incentivize blenders to use more Group II heavy grades instead.

·        Asia’s Group II heavy-grade price premium to Group II N150 rises to highest in more than two years.

·        Group II heavy-grade premium widens amid more plentiful availability of Group II light grades, which also face pressure from increasingly competitive prices for supplies of Group III base oils.

·        Strength of Group II heavy-grade prices fails to extend beyond Asia.

·        US Group II heavy-grade price premium to Group I heavy neutrals falls steadily since mid-2023 to lowest in more than a year; premium to Group II light grades falls to lowest since late-2022.

·        Europe’s Group II heavy-grade price premium to Group I heavy neutrals stays range-bound since mid-Nov 2023; premium to Group II light grades holds close to narrowest in almost three years.

·        Recent strength of Asia Group II heavy-grade prices vs US/Europe heavy grades points to fundamentals-related factors specific to Asia-Pacific region.

·        Asia’s Group II prices typically reach a level that incentivizes blenders to use more Group I base oils instead.

·        Tighter availability of Group I base oils in Asia is likely to limit such moves in the coming months.

·        Trend raises prospect of Asia Group II heavy grades staying firmer for longer.