· Asia’s base oils supply likely to stay readily available amid signs of steady-to-higher flows from several key exporters.· Asia’s Group I and Group II price premium to competing fuel prices rises strongly, adding to incentive for refiners to maintain or increase base oils output at a time when demand is more muted.· Arbitrage to move surplus Group II supplies from Asia to outlets like Americas stays hard to work.· Less feasible arbitrage opportunities could magnify impact of any build-up of surplus supplies.· South Korea’s base oils exports in first three weeks of April 2024 show signs of lagging volumes during same period in March 2024.· Slowdown could reflect impact of Group III plant maintenance in South Korea from mid-March 2024..· Taiwan’s April base oils exports hold firm, likely to outpace export volumes in March 2024.· Singapore’s base oils exports extend recovery since early-April, with strong pick-up in shipments to China and India.· Singapore takes delivery of shipment from the Netherlands in the past week.· Shipment is first from the Netherlands since Aug 2023.· Shipment follows surge in US base oils exports to Singapore in Feb 2024.· Any extension of the trend would add to Asia’s base oils supply..· South Korea’s March base oils exports rise, with steady flows to SE Asia and unusually large share of supplies moving to India and Middle East..· Trend highlights importance of those markets and cushions impact of more muted Chinese demand.· Slowdown in China’s demand partly reflects rise in country’s own base oils production capacity.· A repeat of that scenario is set to take place over the coming year in India and in southeast Asia.· The development could shrink the number of outlets for South Korea’s base oils exports..· India’s imports of very-light grade base oils stay lower in March 2024 amid dip in supplies from Spain.· Imports could face more pressure after India’s retail diesel premium to CFR India N70 prices fell in April 2024 to its narrowest in five months..· The narrower premium often coincides with weaker demand for light-grade base oils.· A narrower premium of CFR India Group II prices over US prices also cuts the attraction of arbitrage flows from that market.· India's imports from sources like Spain show signs of improving but still taking longer than usual to move to India.· Imports from Saudi Arabia also face ongoing logistical issues even though they show signs of continuing for now..Asia base oils demand outlook: Week of 22 April
· Asia’s base oils supply likely to stay readily available amid signs of steady-to-higher flows from several key exporters.· Asia’s Group I and Group II price premium to competing fuel prices rises strongly, adding to incentive for refiners to maintain or increase base oils output at a time when demand is more muted.· Arbitrage to move surplus Group II supplies from Asia to outlets like Americas stays hard to work.· Less feasible arbitrage opportunities could magnify impact of any build-up of surplus supplies.· South Korea’s base oils exports in first three weeks of April 2024 show signs of lagging volumes during same period in March 2024.· Slowdown could reflect impact of Group III plant maintenance in South Korea from mid-March 2024..· Taiwan’s April base oils exports hold firm, likely to outpace export volumes in March 2024.· Singapore’s base oils exports extend recovery since early-April, with strong pick-up in shipments to China and India.· Singapore takes delivery of shipment from the Netherlands in the past week.· Shipment is first from the Netherlands since Aug 2023.· Shipment follows surge in US base oils exports to Singapore in Feb 2024.· Any extension of the trend would add to Asia’s base oils supply..· South Korea’s March base oils exports rise, with steady flows to SE Asia and unusually large share of supplies moving to India and Middle East..· Trend highlights importance of those markets and cushions impact of more muted Chinese demand.· Slowdown in China’s demand partly reflects rise in country’s own base oils production capacity.· A repeat of that scenario is set to take place over the coming year in India and in southeast Asia.· The development could shrink the number of outlets for South Korea’s base oils exports..· India’s imports of very-light grade base oils stay lower in March 2024 amid dip in supplies from Spain.· Imports could face more pressure after India’s retail diesel premium to CFR India N70 prices fell in April 2024 to its narrowest in five months..· The narrower premium often coincides with weaker demand for light-grade base oils.· A narrower premium of CFR India Group II prices over US prices also cuts the attraction of arbitrage flows from that market.· India's imports from sources like Spain show signs of improving but still taking longer than usual to move to India.· Imports from Saudi Arabia also face ongoing logistical issues even though they show signs of continuing for now..Asia base oils demand outlook: Week of 22 April