· Asia’s base oils demand likely to be mixed.· Balanced supply-demand fundamentals support steady demand.· Lower crude oil prices could prompt buyers to hold off until they are comfortable that prices have completed any price adjustments.· China’s demand for overseas supplies likely to stay muted; demand in other regions likely to hold firm.· China’s rising domestic base oils supply and downward price pressure curbs domestic demand.· Falling crude and diesel prices compound the weak buying interest.· China’s domestic bright stock premium to fob Asia prices weakens for second week, after peaking at end-Oct 2023 at highest this year.· China’s healthy supply and muted demand contrasts with more balanced supply, steadier demand in rest of Asia-Pacific market..· Thailand’s September lube demand rises at fastest pace in more than two years on rebounding engine oils, industrial oils consumption..· Lube demand gets seasonal boost at end of Q3 2023.· Even with seasonal boost, lube consumption is much higher than usual for month of September.· Rising lube demand could be bellwether for economic activity over coming months.· Engine oils consumption typically gets support from strong activity in tourism sector.· Thailand’s tourism sector expected to get a boost from country’s move to waive visa requirements from growing number of countries, including China and India..· Indonesia’s September base oils imports rise to highest in more than four years.· Indonesia’s Q3 base oils imports rise yoy for tenth time in a row..· Sustained rise in Indonesia’s imports points to pick-up in demand following slowdown at start of 2023.· Indonesia’s rising consumption absorbs growing volume of supplies from Singapore.· Trend helps to balance out weaker demand in China.· South Korea’s share of Indonesia’s base oils imports continues to dwindle..· Trend compounds impact of weaker Chinese demand, increases pressure to boost supplies to other markets. .· Philippines’ September base oils/lube imports fall for seventh month, but edge up from Aug 2023 levels..· Rise in month-on-month volumes adds to signs of strong pick-up in regional consumption at end-Q3 2023.· Philippines’ September base oils/lube imports from South Korea rise for fourth time in five months, contrasting with ongoing slide in shipments from Singapore..· Philippines’ rising base oils imports from South Korea partially cushion slowdown in flows to Indonesia.· Size of rise in shipments to Philippines is much smaller than size of fall in shipments to Indonesia..· Singapore’s base oils exports to India fall sharply over last four weeks to Nov 8 2023, while shipments to Indonesia and China hold steadier..· Sustained slowdown in flows to India suggests buyers are covering more of their requirements with supplies from other sources.· Sustained slowdown in flows follows India’s unusually high import volumes from Singapore in Sept and Oct 2023.· High import volumes likely helped to replenish blenders’ stocks, prompting moves to slow down subsequent procurement of more supplies.· India’s imports from Saudi Arabia also rise strongly in Oct 2023, cushioning slowdown in shipments from US.· India’s imports from South Korea show signs of rising strongly in Nov 2023, adding to supply. .· India’s October lube demand falls for first time in six months..· Slowdown follows strong demand that outpaced supply during Q3 2023.· Slowdown in demand coincides with signs of firm base oils import volumes in Oct 2023.· Slower demand and rising imports likely to boost blenders’ inventories.· Blenders’ replenished stocks, lower crude oil prices and prospect of revival of shipments from US likely to curb buyers’ urgency to lock in more supplies.· But India’s widening imported Group II light-grade premium to regional gasoil prices suggests demand stays firm.· Wide Group II premium to regional gasoil prices contrasts with smaller light-grade discount to domestic retail diesel prices, which tends to curb demand..· Pakistan’s September lube demand extends rise for third month..· Trend suggests demand shows signs of sustained recovery.· Recovery in Pakistan’s lube consumption would support firmer demand for base oils imports, with South Korea the key beneficiary..Global base oils - week of Nov 13: Price outlook - arbitrage
· Asia’s base oils demand likely to be mixed.· Balanced supply-demand fundamentals support steady demand.· Lower crude oil prices could prompt buyers to hold off until they are comfortable that prices have completed any price adjustments.· China’s demand for overseas supplies likely to stay muted; demand in other regions likely to hold firm.· China’s rising domestic base oils supply and downward price pressure curbs domestic demand.· Falling crude and diesel prices compound the weak buying interest.· China’s domestic bright stock premium to fob Asia prices weakens for second week, after peaking at end-Oct 2023 at highest this year.· China’s healthy supply and muted demand contrasts with more balanced supply, steadier demand in rest of Asia-Pacific market..· Thailand’s September lube demand rises at fastest pace in more than two years on rebounding engine oils, industrial oils consumption..· Lube demand gets seasonal boost at end of Q3 2023.· Even with seasonal boost, lube consumption is much higher than usual for month of September.· Rising lube demand could be bellwether for economic activity over coming months.· Engine oils consumption typically gets support from strong activity in tourism sector.· Thailand’s tourism sector expected to get a boost from country’s move to waive visa requirements from growing number of countries, including China and India..· Indonesia’s September base oils imports rise to highest in more than four years.· Indonesia’s Q3 base oils imports rise yoy for tenth time in a row..· Sustained rise in Indonesia’s imports points to pick-up in demand following slowdown at start of 2023.· Indonesia’s rising consumption absorbs growing volume of supplies from Singapore.· Trend helps to balance out weaker demand in China.· South Korea’s share of Indonesia’s base oils imports continues to dwindle..· Trend compounds impact of weaker Chinese demand, increases pressure to boost supplies to other markets. .· Philippines’ September base oils/lube imports fall for seventh month, but edge up from Aug 2023 levels..· Rise in month-on-month volumes adds to signs of strong pick-up in regional consumption at end-Q3 2023.· Philippines’ September base oils/lube imports from South Korea rise for fourth time in five months, contrasting with ongoing slide in shipments from Singapore..· Philippines’ rising base oils imports from South Korea partially cushion slowdown in flows to Indonesia.· Size of rise in shipments to Philippines is much smaller than size of fall in shipments to Indonesia..· Singapore’s base oils exports to India fall sharply over last four weeks to Nov 8 2023, while shipments to Indonesia and China hold steadier..· Sustained slowdown in flows to India suggests buyers are covering more of their requirements with supplies from other sources.· Sustained slowdown in flows follows India’s unusually high import volumes from Singapore in Sept and Oct 2023.· High import volumes likely helped to replenish blenders’ stocks, prompting moves to slow down subsequent procurement of more supplies.· India’s imports from Saudi Arabia also rise strongly in Oct 2023, cushioning slowdown in shipments from US.· India’s imports from South Korea show signs of rising strongly in Nov 2023, adding to supply. .· India’s October lube demand falls for first time in six months..· Slowdown follows strong demand that outpaced supply during Q3 2023.· Slowdown in demand coincides with signs of firm base oils import volumes in Oct 2023.· Slower demand and rising imports likely to boost blenders’ inventories.· Blenders’ replenished stocks, lower crude oil prices and prospect of revival of shipments from US likely to curb buyers’ urgency to lock in more supplies.· But India’s widening imported Group II light-grade premium to regional gasoil prices suggests demand stays firm.· Wide Group II premium to regional gasoil prices contrasts with smaller light-grade discount to domestic retail diesel prices, which tends to curb demand..· Pakistan’s September lube demand extends rise for third month..· Trend suggests demand shows signs of sustained recovery.· Recovery in Pakistan’s lube consumption would support firmer demand for base oils imports, with South Korea the key beneficiary..Global base oils - week of Nov 13: Price outlook - arbitrage