· Europe’s Group I domestic base oils prices outperform Group II prices and Group III prices in Q2 2024.· Strength of domestic Group I prices relative to other grades reflects increasingly tight supply fundamentals that outweigh demand.· Europe’s domestic Group I prices maintain or revert to relatively small premium to Group I export prices in Q2 2024.· Relative strength of Group I export prices reflects signs of even tighter Group I supply fundamentals for overseas markets.· Refiners’ focus of prioritising domestic market shows signs of extending to other markets where Group I supply is tighter.· Trend raises prospect of magnifying impact of tighter Group I availability in markets that are reliant on imports of the product to cover requirements.· Europe’s Group I domestic SN 150 discount to Group II and Group III base oils narrows in Q2 2024, reflecting tighter supply fundamentals compared with premium grades..· Europe’s Group I domestic SN 500 premium to export prices steadies at less than $100/tonne in June 2024, down from average levels of around $220/tonne in Q1 2024 and more than $150/tonne in Q4 2023.· Smaller domestic premium reflects even tighter supply-demand fundamentals for export market as refiners prioritise requirements in regional market.· Italy’s base oils exports account for at least 86% of country’s total consumption of domestic base oils in 2021-2023, when surplus supply was more plentiful.· Italy’s base oils exports’ share of country’s total consumption falls to close to 80% in Q1 2024 as surplus supply tightens..· Focus on domestic market extends to other markets where Group I supply has tightened, such as Asia.· Asia’s Group I base oils exports from Japan, Indonesia and Thailand fall by almost 50% in first four months of 2024 from year-earlier..· Japan’s base oils exports slump in 2024 following Group I plant closure in Q4 2023.· Japan’s base oils exports account for 20% of country’s output in first four months of 2024, versus 25% share in 2023 and 31% share in 2022..· Tighter availability of Group I base oils curbs supply options for buyers in other markets that produce Group I base oils like Singapore and Thailand.· Thailand’s base oils demand absorbs more than 25% of country’s domestic Group I base oils output in first four months of 2024, up from 21% share in 2023..· Drop in exports from key Group I producers in Europe and Asia cushions impact of tighter Group I supply for local buyers as refiners prioritize domestic market.· Drop in exports instead compounds impact of tighter Group I supply for overseas buyers.· Narrower price-spread between domestic and export prices in markets like Europe reflects the tighter supply for overseas buyers.· Larger impact on export markets adds to incentive for overseas buyers to line up alternative supplies in place of Group I base oils..Global base oils margins outlook: Week of 24 June.Asia base oils demand outlook: Week of 24 June.Asia base oils supply outlook: Week of 24 June
· Europe’s Group I domestic base oils prices outperform Group II prices and Group III prices in Q2 2024.· Strength of domestic Group I prices relative to other grades reflects increasingly tight supply fundamentals that outweigh demand.· Europe’s domestic Group I prices maintain or revert to relatively small premium to Group I export prices in Q2 2024.· Relative strength of Group I export prices reflects signs of even tighter Group I supply fundamentals for overseas markets.· Refiners’ focus of prioritising domestic market shows signs of extending to other markets where Group I supply is tighter.· Trend raises prospect of magnifying impact of tighter Group I availability in markets that are reliant on imports of the product to cover requirements.· Europe’s Group I domestic SN 150 discount to Group II and Group III base oils narrows in Q2 2024, reflecting tighter supply fundamentals compared with premium grades..· Europe’s Group I domestic SN 500 premium to export prices steadies at less than $100/tonne in June 2024, down from average levels of around $220/tonne in Q1 2024 and more than $150/tonne in Q4 2023.· Smaller domestic premium reflects even tighter supply-demand fundamentals for export market as refiners prioritise requirements in regional market.· Italy’s base oils exports account for at least 86% of country’s total consumption of domestic base oils in 2021-2023, when surplus supply was more plentiful.· Italy’s base oils exports’ share of country’s total consumption falls to close to 80% in Q1 2024 as surplus supply tightens..· Focus on domestic market extends to other markets where Group I supply has tightened, such as Asia.· Asia’s Group I base oils exports from Japan, Indonesia and Thailand fall by almost 50% in first four months of 2024 from year-earlier..· Japan’s base oils exports slump in 2024 following Group I plant closure in Q4 2023.· Japan’s base oils exports account for 20% of country’s output in first four months of 2024, versus 25% share in 2023 and 31% share in 2022..· Tighter availability of Group I base oils curbs supply options for buyers in other markets that produce Group I base oils like Singapore and Thailand.· Thailand’s base oils demand absorbs more than 25% of country’s domestic Group I base oils output in first four months of 2024, up from 21% share in 2023..· Drop in exports from key Group I producers in Europe and Asia cushions impact of tighter Group I supply for local buyers as refiners prioritize domestic market.· Drop in exports instead compounds impact of tighter Group I supply for overseas buyers.· Narrower price-spread between domestic and export prices in markets like Europe reflects the tighter supply for overseas buyers.· Larger impact on export markets adds to incentive for overseas buyers to line up alternative supplies in place of Group I base oils..Global base oils margins outlook: Week of 24 June.Asia base oils demand outlook: Week of 24 June.Asia base oils supply outlook: Week of 24 June
