· Asia’s base oils price premium to regional gasoil prices holds steadier after sliding over past month.· Premiums stay well above year-earlier levels, especially for Group II heavy grades and Group I base oils.· Firmer premiums point to more balanced supply-demand fundamentals, limit incentive for refiners to trim output.· Tight Group I supply in Europe curbs prospect of pick-up in arbitrage shipments from that market to Asia, boosts attraction of alternative sources like Russia.· FOB NE Asia Group II heavy-grade price premium to light grades rises further to widest since late-2021.· Sustained rise in heavy-grade premium points to increasingly firm fundamentals for the product..· Any pick-up in demand from buyers from Americas markets would help to remove surplus supplies from Asia-Pacific region.· Arbitrage to line up such shipments remains more feasible than in April-May 2024, especially for heavy grades.· Buyers could be more interested in such shipments as insurance against any supply-related disruptions in US over coming months.· High freight costs could curb any such moves, complicating removal of surplus supplies from the region. · South Korea’s base oils exports show signs of falling in June 2024, shrinking regional surplus carried into Q3 2024.· Exports show signs of reviving so far in July 2024..· Taiwan’s base oils exports show signs of rebounding strongly in recent weeks after falling to four-month low in June 2024.· Taiwan’s base oils exports to China slump in June 2024, with signs of trend extending into July 2024..· Slowdown could reflect impact of China’s removal of tariff concessions on Taiwan’s base oils shipments to China from mid-June 2024.· Rise in shipments in recent weeks instead triggers surge in flows to southeast Asia.· Any extension of the trend could add to competition for market share in southeast Asia..· Singapore’s base oils exports show signs of reviving in H1 July 2024, following slowdown in June 2024.· Singapore likely to take delivery of additional supplies of US origin after US base oils exports to the island-state stay unusually high in May 2024..· Singapore duly takes delivery last week of a shipment of US origin for first time in more than a month.· Unusually-large flow of shipments from US to Singapore adds to Asia-Pacific region’s supply, tightens US supply..· Asia’s base oils supply rises to nine-month high in May 2024 mostly on rebound in output from South Korea..· Asia’s May base oils exports duly rise to fourteen-month high, with wave of shipments moving to southeast Asia and India.· Rise in supply and exports boost regional buyers’ stocks ahead of seasonal slowdown in demand at start of third quarter of the year.· Subsequent slowdown in demand for additional base oils supplies through rest of Q2 2024 raised prospect of larger build-up of surplus supplies in the region.· Slowdown in exports from key sources like Singapore, Taiwan and South Korea in June 2024 could partially counter impact of slowdown in demand, curbing size of any supply-build..· Larger-than-expected rise in Asia’s lube demand in May 2024 also curbed size of supply-build in May 2024..· Trend raises prospect of limiting size of regional supply-build before Q3 2024..Asia base oils demand outlook: Week of 15 July.Global base oils margins outlook: Week of 15 July
· Asia’s base oils price premium to regional gasoil prices holds steadier after sliding over past month.· Premiums stay well above year-earlier levels, especially for Group II heavy grades and Group I base oils.· Firmer premiums point to more balanced supply-demand fundamentals, limit incentive for refiners to trim output.· Tight Group I supply in Europe curbs prospect of pick-up in arbitrage shipments from that market to Asia, boosts attraction of alternative sources like Russia.· FOB NE Asia Group II heavy-grade price premium to light grades rises further to widest since late-2021.· Sustained rise in heavy-grade premium points to increasingly firm fundamentals for the product..· Any pick-up in demand from buyers from Americas markets would help to remove surplus supplies from Asia-Pacific region.· Arbitrage to line up such shipments remains more feasible than in April-May 2024, especially for heavy grades.· Buyers could be more interested in such shipments as insurance against any supply-related disruptions in US over coming months.· High freight costs could curb any such moves, complicating removal of surplus supplies from the region. · South Korea’s base oils exports show signs of falling in June 2024, shrinking regional surplus carried into Q3 2024.· Exports show signs of reviving so far in July 2024..· Taiwan’s base oils exports show signs of rebounding strongly in recent weeks after falling to four-month low in June 2024.· Taiwan’s base oils exports to China slump in June 2024, with signs of trend extending into July 2024..· Slowdown could reflect impact of China’s removal of tariff concessions on Taiwan’s base oils shipments to China from mid-June 2024.· Rise in shipments in recent weeks instead triggers surge in flows to southeast Asia.· Any extension of the trend could add to competition for market share in southeast Asia..· Singapore’s base oils exports show signs of reviving in H1 July 2024, following slowdown in June 2024.· Singapore likely to take delivery of additional supplies of US origin after US base oils exports to the island-state stay unusually high in May 2024..· Singapore duly takes delivery last week of a shipment of US origin for first time in more than a month.· Unusually-large flow of shipments from US to Singapore adds to Asia-Pacific region’s supply, tightens US supply..· Asia’s base oils supply rises to nine-month high in May 2024 mostly on rebound in output from South Korea..· Asia’s May base oils exports duly rise to fourteen-month high, with wave of shipments moving to southeast Asia and India.· Rise in supply and exports boost regional buyers’ stocks ahead of seasonal slowdown in demand at start of third quarter of the year.· Subsequent slowdown in demand for additional base oils supplies through rest of Q2 2024 raised prospect of larger build-up of surplus supplies in the region.· Slowdown in exports from key sources like Singapore, Taiwan and South Korea in June 2024 could partially counter impact of slowdown in demand, curbing size of any supply-build..· Larger-than-expected rise in Asia’s lube demand in May 2024 also curbed size of supply-build in May 2024..· Trend raises prospect of limiting size of regional supply-build before Q3 2024..Asia base oils demand outlook: Week of 15 July.Global base oils margins outlook: Week of 15 July