· China’s Group II base oils prices stay unusually weak versus prices in Asia and other markets like India, ICIS data shows.· Low prices versus other markets point to a weaker-than-usual seasonal pick-up in China’s domestic lube demand from end-Q3 2023.· Price weakness contrasts with rebound in China’s base oils demand in Sep 2023, boosting buyers’ stocks.· Rebound in demand could point to stronger revival in domestic lube consumption.· Price weakness instead suggests China’s base oils demand could slow further as domestic blenders take longer than usual to consume those stocks.· China’s base oils imports rebound, exports slump and domestic output rises in September, pointing to pick-up in domestic demand in anticipation of firmer lube consumption..· China’s domestic Group II light-grade price premium to domestic diesel prices rebounds from Sep 2023, adding to signs of firmer demand.· Other signals point to concern about strength of the seasonal pick-up in lube consumption, and that those concerns are now being realized. · Such a scenario would leave buyers looking to work down base oils supplies that built up during Sep 2023.· Surge in China’s September base oils imports fail to extend to shipments from Taiwan, which fall by more than half from Aug 2023..· Buyers hold off stock-building even ahead of shutdown of Taiwan’s Group II plant in Oct 2023 for maintenance work.· October-loading cargoes from Taiwan slump in response to the maintenance work. Even so, one rare October shipment moves to Philippines rather than to China.· China’s relative Group II price strength fails to extend beyond its recovery versus diesel.· China’s domestic Group II N150 price premium to fob Asia prices holds close to lowest in more than a year.· China’s falling domestic Group II N150 premium to fob Asia prices contrasts with surge in its premium in Q4 2022..· Prices for cfr northeast Asia Group II base oils strengthened versus cfr India prices during Q3 2023, pointing to firmer Chinese demand to attract more supplies.· Prices for cfr northeast Asia Group II base oils then slid from 2H Aug 2023 to steepest discount to cfr India prices in almost a year..· Group I bright stock is the outlier.· Prices for cfr NE Asia bright stock strengthened versus cfr India prices during Q3 2023, maintain small premium so far in Q4 2023.· China’s domestic bright stock price premium to fob Asia prices rises steadily since May 2023 to levels that exceed year-earlier levels..· Except for bright stock, price and supply signals suggest that China’s lube demand remains weak, and that Asia refiners should plan accordingly..Global base oils - week of Oct 30: Price outlook - margins
· China’s Group II base oils prices stay unusually weak versus prices in Asia and other markets like India, ICIS data shows.· Low prices versus other markets point to a weaker-than-usual seasonal pick-up in China’s domestic lube demand from end-Q3 2023.· Price weakness contrasts with rebound in China’s base oils demand in Sep 2023, boosting buyers’ stocks.· Rebound in demand could point to stronger revival in domestic lube consumption.· Price weakness instead suggests China’s base oils demand could slow further as domestic blenders take longer than usual to consume those stocks.· China’s base oils imports rebound, exports slump and domestic output rises in September, pointing to pick-up in domestic demand in anticipation of firmer lube consumption..· China’s domestic Group II light-grade price premium to domestic diesel prices rebounds from Sep 2023, adding to signs of firmer demand.· Other signals point to concern about strength of the seasonal pick-up in lube consumption, and that those concerns are now being realized. · Such a scenario would leave buyers looking to work down base oils supplies that built up during Sep 2023.· Surge in China’s September base oils imports fail to extend to shipments from Taiwan, which fall by more than half from Aug 2023..· Buyers hold off stock-building even ahead of shutdown of Taiwan’s Group II plant in Oct 2023 for maintenance work.· October-loading cargoes from Taiwan slump in response to the maintenance work. Even so, one rare October shipment moves to Philippines rather than to China.· China’s relative Group II price strength fails to extend beyond its recovery versus diesel.· China’s domestic Group II N150 price premium to fob Asia prices holds close to lowest in more than a year.· China’s falling domestic Group II N150 premium to fob Asia prices contrasts with surge in its premium in Q4 2022..· Prices for cfr northeast Asia Group II base oils strengthened versus cfr India prices during Q3 2023, pointing to firmer Chinese demand to attract more supplies.· Prices for cfr northeast Asia Group II base oils then slid from 2H Aug 2023 to steepest discount to cfr India prices in almost a year..· Group I bright stock is the outlier.· Prices for cfr NE Asia bright stock strengthened versus cfr India prices during Q3 2023, maintain small premium so far in Q4 2023.· China’s domestic bright stock price premium to fob Asia prices rises steadily since May 2023 to levels that exceed year-earlier levels..· Except for bright stock, price and supply signals suggest that China’s lube demand remains weak, and that Asia refiners should plan accordingly..Global base oils - week of Oct 30: Price outlook - margins