· Asia’s Group II base oils prices strengthen relative to US prices in recent weeks..· Price strength coincides with signs of tighter-than-usual supply in Asia at end-Q3 2024..· Asia’s base oils supply surplus falls sharply in Aug 2024 from previous month, after already staying low in Q2 2024..· Asia’s base oils supply surplus likely tightened even more in Sept 2024 as plant maintenance work in South Korea cut output..· South Korea’s base oils exports fall in Sept 2024 to lowest in more than a decade, reflecting drop in supply..· Tighter supply in Asia curbs typical wave of arbitrage shipments that market often faces during third quarter to clear surplus volumes.· Lack of arbitrage shipments curbs opportunity for buyers in markets like India and Middle East to replenish stocks at competitive prices..· CFR India Group II prices instead rise relative to FOB NE Asia prices in recent weeks..· CFR India Group II prices also strengthen relative to US export prices in recent weeks, narrowing their discount to US prices.· US market also shows signs of smaller-than-expected surplus at end-Q3/early Q4 2024..· Tighter-than-expected availability in Asia and US could boost interest in supplies from Europe.· Europe’s base oils supply outpaces demand in July 2024 for third month in a row..· Europe’s lube demand extends steep contraction in Aug 2024..· Trend raises prospect of Europe’s base oils supply continuing to outpace demand in Aug 2024. .· Europe’s premium-grade base oils prices maintain steep premium to prices in other regions like US and Asia in early Q4 2024..· Firm prices sustain attraction for overseas refiners to move more supplies to Europe, where demand is shrinking.· Dynamic could extend rise in Europe’s surplus supplies beyond Aug 2024.· Any such sign of rising surplus supplies could attract interest from buyers facing tighter-than-expected supplies from refiners in Asia and US.· Any such sign of rising surplus supplies could trigger more price adjustments that make arbitrage flows more feasible from Europe to those buyers’ markets..Global base oils margins outlook: Week of 21 Oct.Asia base oils demand outlook: Week of 21 Oct.Asia base oils supply outlook: Week of 21 Oct
· Asia’s Group II base oils prices strengthen relative to US prices in recent weeks..· Price strength coincides with signs of tighter-than-usual supply in Asia at end-Q3 2024..· Asia’s base oils supply surplus falls sharply in Aug 2024 from previous month, after already staying low in Q2 2024..· Asia’s base oils supply surplus likely tightened even more in Sept 2024 as plant maintenance work in South Korea cut output..· South Korea’s base oils exports fall in Sept 2024 to lowest in more than a decade, reflecting drop in supply..· Tighter supply in Asia curbs typical wave of arbitrage shipments that market often faces during third quarter to clear surplus volumes.· Lack of arbitrage shipments curbs opportunity for buyers in markets like India and Middle East to replenish stocks at competitive prices..· CFR India Group II prices instead rise relative to FOB NE Asia prices in recent weeks..· CFR India Group II prices also strengthen relative to US export prices in recent weeks, narrowing their discount to US prices.· US market also shows signs of smaller-than-expected surplus at end-Q3/early Q4 2024..· Tighter-than-expected availability in Asia and US could boost interest in supplies from Europe.· Europe’s base oils supply outpaces demand in July 2024 for third month in a row..· Europe’s lube demand extends steep contraction in Aug 2024..· Trend raises prospect of Europe’s base oils supply continuing to outpace demand in Aug 2024. .· Europe’s premium-grade base oils prices maintain steep premium to prices in other regions like US and Asia in early Q4 2024..· Firm prices sustain attraction for overseas refiners to move more supplies to Europe, where demand is shrinking.· Dynamic could extend rise in Europe’s surplus supplies beyond Aug 2024.· Any such sign of rising surplus supplies could attract interest from buyers facing tighter-than-expected supplies from refiners in Asia and US.· Any such sign of rising surplus supplies could trigger more price adjustments that make arbitrage flows more feasible from Europe to those buyers’ markets..Global base oils margins outlook: Week of 21 Oct.Asia base oils demand outlook: Week of 21 Oct.Asia base oils supply outlook: Week of 21 Oct