· Asia’s base oils prices hold firm relative to feedstock/gasoil prices, especially for heavy grades.· Firm base oils values partly reflect tighter regional supply in recent months.· Base oils values stay firm even with Asia’s recent supply tightness likely to ease over coming weeks following completion of plant maintenance work.· Less feasible arbitrage to other markets, and more feasible arbitrage from other markets to Asia, could boost regional supply further..· Improving supply would follow drop in Asia’s base oils supply to seven-month low in Sept 2024..· Fall in supply coincides with slump in Asia’s base oils exports to four-year low, tightening availability throughout the region.· Drop in supply cuts surplus over demand to three-month low in Sept 2024..· Surplus would have been even smaller but for drop in Asia’s lube demand in Sept 2024.· Tight supply likely to cushion impact of weaker demand at start of Q4 2024.· Steady-to-lower base oils margins in recent weeks adds to signs that peak period of supply-tightness has passed.· Expected improvement in supply from around middle of Q4 2024 would contrast with prospect of seasonal slowdown in demand.· Dynamic could trigger rise in surplus supplies during final weeks of Q4 2024 and early next year.· Firm margins that incentivize refiners to maintain or raise output could add to size of surplus..· China’s paraffinic base oils output rises in Oct 2024 to highest since end-2021..· Output gets boost from surge in production of Group II/III base oils.· Rising output of premium-grade base oils boosts their share of China’s paraffinic base oils production to highest in almost three years..· That share is likely to rise even more following closure of key Group I base oils unit in China in Oct 2024.· Rising base oils output likely to cut further China’s requirements for overseas supplies.· Trend would free up more shipments needing to seek alternative outlets.· Trend would help to boost regional supply at a time when availability has been tighter in recent months.· Trend would help to boost regional supply at a time when availability is set to improve in the coming months..· Thailand’s base oils output rises in Q3 2024 to highest quarterly level since H1 2022..· Higher output contrasts with typical drop in production in third quarter of the year, when demand usually slows.· Asia’s firm Group I base oils margins in Q3 2024 highlight tight supply-demand dynamics for the grade even with Thailand’s higher base oils output..· Thailand’s base oils supply exceeds demand in Sept 2024 for second time in three months..· Pick-up in surplus supply raises prospect of rise in Group I base oils exports in Q4 2024..· Singapore takes delivery of another large cargo from Saudi Arabia in past week.· Cargo likely consists of Group I base oils, adds to large rise in shipments from Saudi Arabia to Singapore in H2 2024..· Rise in shipments from Saudi Arabia and Europe to southeast Asia in H2 2024 help to boost region’s Group I base oils supply.· Taiwan’s base oils exports stay lower so far in Nov 2024 after surge in flows at end-Oct 2024..China’s October base oils output rises.Thailand’s Sept base oils output slips.Asia’s September lube demand falls.Asia base oils demand outlook: Week of 11 Nov
· Asia’s base oils prices hold firm relative to feedstock/gasoil prices, especially for heavy grades.· Firm base oils values partly reflect tighter regional supply in recent months.· Base oils values stay firm even with Asia’s recent supply tightness likely to ease over coming weeks following completion of plant maintenance work.· Less feasible arbitrage to other markets, and more feasible arbitrage from other markets to Asia, could boost regional supply further..· Improving supply would follow drop in Asia’s base oils supply to seven-month low in Sept 2024..· Fall in supply coincides with slump in Asia’s base oils exports to four-year low, tightening availability throughout the region.· Drop in supply cuts surplus over demand to three-month low in Sept 2024..· Surplus would have been even smaller but for drop in Asia’s lube demand in Sept 2024.· Tight supply likely to cushion impact of weaker demand at start of Q4 2024.· Steady-to-lower base oils margins in recent weeks adds to signs that peak period of supply-tightness has passed.· Expected improvement in supply from around middle of Q4 2024 would contrast with prospect of seasonal slowdown in demand.· Dynamic could trigger rise in surplus supplies during final weeks of Q4 2024 and early next year.· Firm margins that incentivize refiners to maintain or raise output could add to size of surplus..· China’s paraffinic base oils output rises in Oct 2024 to highest since end-2021..· Output gets boost from surge in production of Group II/III base oils.· Rising output of premium-grade base oils boosts their share of China’s paraffinic base oils production to highest in almost three years..· That share is likely to rise even more following closure of key Group I base oils unit in China in Oct 2024.· Rising base oils output likely to cut further China’s requirements for overseas supplies.· Trend would free up more shipments needing to seek alternative outlets.· Trend would help to boost regional supply at a time when availability has been tighter in recent months.· Trend would help to boost regional supply at a time when availability is set to improve in the coming months..· Thailand’s base oils output rises in Q3 2024 to highest quarterly level since H1 2022..· Higher output contrasts with typical drop in production in third quarter of the year, when demand usually slows.· Asia’s firm Group I base oils margins in Q3 2024 highlight tight supply-demand dynamics for the grade even with Thailand’s higher base oils output..· Thailand’s base oils supply exceeds demand in Sept 2024 for second time in three months..· Pick-up in surplus supply raises prospect of rise in Group I base oils exports in Q4 2024..· Singapore takes delivery of another large cargo from Saudi Arabia in past week.· Cargo likely consists of Group I base oils, adds to large rise in shipments from Saudi Arabia to Singapore in H2 2024..· Rise in shipments from Saudi Arabia and Europe to southeast Asia in H2 2024 help to boost region’s Group I base oils supply.· Taiwan’s base oils exports stay lower so far in Nov 2024 after surge in flows at end-Oct 2024..China’s October base oils output rises.Thailand’s Sept base oils output slips.Asia’s September lube demand falls.Asia base oils demand outlook: Week of 11 Nov
