· Asia’s Group I base oils supply set to remain tighter than usual at least until March 2024.· Plant maintenance work in southeast Asia in early 2024 coincides with signs of ongoing slowdown in supplies from China to Singapore and slump in shipments from Japan to southeast Asia.· Slowdown raises prospect of buyers seeking Group I supplies from other regions to cover requirements.· Group I bright stock prices in China and India rise more strongly than rising fob Asia bright stock prices in Jan 2024.· Strength of bright stock prices in destination markets like China and India points to tighter availability throughout the region.· Asia’s Group II base oils supply likely to be tighter than expected amid combination of run-cuts and unexpected plant shutdown.· Asia’s falling Group II price premium to regional gasoil prices adds to incentive for refiners to cut output.· Any delay in the restart of Taiwan's Group II base oils unit would coincide with a likely pick-up in Chinese demand from end-Feb 2024, after the lunar new year holidays..· Singapore’s December base oils imports fall to twenty-three month low..· Shipments fall because of pause in supplies from China and Japan.· Singapore’s base oils imports stay unusually low in Jan 2024 amid ongoing slide in shipments from China..· Prospect of sporadic flows from China and ongoing halt in shipments from Japan leaves Singapore short of Group I base oils.· Trend leaves Singapore more reliant on Group I supplies from more distant markets like Mideast Gulf and Europe.· Trend raises prospect of more volatile Group I supply dynamics in southeast Asia over coming months..· Share of Singapore’s exports moving to southeast Asia falls in Jan 2024 as more shipments head to China..· Trend could point to weaker demand in southeast Asia.· Steadier demand in southeast Asia would conversely point to increasingly tight supply in the region amid growing competition from China. .· China’s December base oils exports to Europe rise to record-high even as total exports stay lower than usual for a second month..· Volume of supplies bound for Europe remains relatively low. But steady flows from Q1 2023 contrast with dearth of any such shipments before then.· Rise in shipments coincides with open arbitrage to move Group II and Group III base oils from Asia to Europe.· Still-open arbitrage and China’s plentiful supply raise prospect of continuation or rise in those trade flows in 2024..· India takes delivery of large volume of supplies from Taiwan and Saudi Arabia so far in Jan 2024, reflecting arrival of wave of supplies that loaded in Dec 2023.· India’s base oils supply from Saudi Arabia likely to fall in coming weeks following slowdown in base oils exports from Yanbu and Jeddah in Jan 2024.· India’s supplies of very-light grade supplies could face additional pressure as sliding price premium to gasoil incentivizes Asia’s refiners to trim availability..Asia base oils - week of Jan 29: Demand outlook.Global base oils - week of Jan 29: Price outlook - arbitrage.Global base oils - week of Jan 29: Price outlook - margins
· Asia’s Group I base oils supply set to remain tighter than usual at least until March 2024.· Plant maintenance work in southeast Asia in early 2024 coincides with signs of ongoing slowdown in supplies from China to Singapore and slump in shipments from Japan to southeast Asia.· Slowdown raises prospect of buyers seeking Group I supplies from other regions to cover requirements.· Group I bright stock prices in China and India rise more strongly than rising fob Asia bright stock prices in Jan 2024.· Strength of bright stock prices in destination markets like China and India points to tighter availability throughout the region.· Asia’s Group II base oils supply likely to be tighter than expected amid combination of run-cuts and unexpected plant shutdown.· Asia’s falling Group II price premium to regional gasoil prices adds to incentive for refiners to cut output.· Any delay in the restart of Taiwan's Group II base oils unit would coincide with a likely pick-up in Chinese demand from end-Feb 2024, after the lunar new year holidays..· Singapore’s December base oils imports fall to twenty-three month low..· Shipments fall because of pause in supplies from China and Japan.· Singapore’s base oils imports stay unusually low in Jan 2024 amid ongoing slide in shipments from China..· Prospect of sporadic flows from China and ongoing halt in shipments from Japan leaves Singapore short of Group I base oils.· Trend leaves Singapore more reliant on Group I supplies from more distant markets like Mideast Gulf and Europe.· Trend raises prospect of more volatile Group I supply dynamics in southeast Asia over coming months..· Share of Singapore’s exports moving to southeast Asia falls in Jan 2024 as more shipments head to China..· Trend could point to weaker demand in southeast Asia.· Steadier demand in southeast Asia would conversely point to increasingly tight supply in the region amid growing competition from China. .· China’s December base oils exports to Europe rise to record-high even as total exports stay lower than usual for a second month..· Volume of supplies bound for Europe remains relatively low. But steady flows from Q1 2023 contrast with dearth of any such shipments before then.· Rise in shipments coincides with open arbitrage to move Group II and Group III base oils from Asia to Europe.· Still-open arbitrage and China’s plentiful supply raise prospect of continuation or rise in those trade flows in 2024..· India takes delivery of large volume of supplies from Taiwan and Saudi Arabia so far in Jan 2024, reflecting arrival of wave of supplies that loaded in Dec 2023.· India’s base oils supply from Saudi Arabia likely to fall in coming weeks following slowdown in base oils exports from Yanbu and Jeddah in Jan 2024.· India’s supplies of very-light grade supplies could face additional pressure as sliding price premium to gasoil incentivizes Asia’s refiners to trim availability..Asia base oils - week of Jan 29: Demand outlook.Global base oils - week of Jan 29: Price outlook - arbitrage.Global base oils - week of Jan 29: Price outlook - margins