· China’s domestic Group III base oils prices fall vs domestic Group II prices since Q2 2023, mirroring similar trend in US and Europe.· China’s domestic Group III price premium to Group II base oils falls by 20% since start of Q3 2023.· Drop in Group III premium lags the more-than 50% fall in Group III premium to Group II prices in US and in Europe.· China’s imports from overseas sources with Group III production rise in March 2024 for fourth time in five months from year-earlier levels.· Trend contrasts with sustained slowdown in US’ Group III base oils imports and more recent dip in Europe’s Group III base oils supply.· Diverging trends suggest that China remains structurally short of Group III base oils even after start-up of new base oils production capacity in recent years.· Recent price trends between different regions reflect such a dynamic.· China’s domestic Group III 4cSt premium to Europe and US Group III prices trends higher from Q2 2023; premium to US prices then surges in recent weeks..· Domestic Group III base oils premium rises even as China’s Group III production rises strongly from H2 2023..· Domestic Group III output stays low relative to Group II base oils output even with rise in production and after start-up of new Group III plants in recent years.· China’s Group III base oils output accounts for 4% of country’s total output in Q1 2024 and 3% in 2023 even after start-up of new capacity..· US market historically faced similar dynamic of low domestic Group III base oils production capacity.· US supplemented low domestic Group III base oils output with imports from sources like South Korea and Middle East.· Trend lifted imports as share of US supply to more than 50% of the total in 2023..· In Europe, Group III base oils accounted for more than 30% of its total supply during last two years..· Group III base oils’ share of total base oils output in China is low compared with supply in US and Europe.· Low share of total output suggests the country still requires additional volumes from overseas markets to meet domestic demand.· China’s base oils imports from markets with Group III production rise in March 2024 to highest in almost three years..· Firm demand and competitive prices versus other regions suggest the trend could continue until China’s domestic Group III output rises more sharply..Global base oils margins outlook: Week of 29 April.Asia base oils demand outlook: Week of 29 April.Asia base oils supply outlook: Week of 29 April
· China’s domestic Group III base oils prices fall vs domestic Group II prices since Q2 2023, mirroring similar trend in US and Europe.· China’s domestic Group III price premium to Group II base oils falls by 20% since start of Q3 2023.· Drop in Group III premium lags the more-than 50% fall in Group III premium to Group II prices in US and in Europe.· China’s imports from overseas sources with Group III production rise in March 2024 for fourth time in five months from year-earlier levels.· Trend contrasts with sustained slowdown in US’ Group III base oils imports and more recent dip in Europe’s Group III base oils supply.· Diverging trends suggest that China remains structurally short of Group III base oils even after start-up of new base oils production capacity in recent years.· Recent price trends between different regions reflect such a dynamic.· China’s domestic Group III 4cSt premium to Europe and US Group III prices trends higher from Q2 2023; premium to US prices then surges in recent weeks..· Domestic Group III base oils premium rises even as China’s Group III production rises strongly from H2 2023..· Domestic Group III output stays low relative to Group II base oils output even with rise in production and after start-up of new Group III plants in recent years.· China’s Group III base oils output accounts for 4% of country’s total output in Q1 2024 and 3% in 2023 even after start-up of new capacity..· US market historically faced similar dynamic of low domestic Group III base oils production capacity.· US supplemented low domestic Group III base oils output with imports from sources like South Korea and Middle East.· Trend lifted imports as share of US supply to more than 50% of the total in 2023..· In Europe, Group III base oils accounted for more than 30% of its total supply during last two years..· Group III base oils’ share of total base oils output in China is low compared with supply in US and Europe.· Low share of total output suggests the country still requires additional volumes from overseas markets to meet domestic demand.· China’s base oils imports from markets with Group III production rise in March 2024 to highest in almost three years..· Firm demand and competitive prices versus other regions suggest the trend could continue until China’s domestic Group III output rises more sharply..Global base oils margins outlook: Week of 29 April.Asia base oils demand outlook: Week of 29 April.Asia base oils supply outlook: Week of 29 April