· Asia’s base oils supply set to get boost following recent/imminent completion of plant-maintenance in Japan/Taiwan.· Asia’s supply set to get further boost from steady flow of arbitrage shipments from US.· Pick-up in shipments of premium-grade base oils from Mideast Gulf to India would add to supplies in that market.· Expected pick-up in regional demand in Q1 2024 would absorb some of the rise in supply.· Asia’s surplus supply could have more difficulty going to Americas market amid more competitive US prices.· Any signs of rise in surplus volumes in Asia would increase need to close the arbitrage to the region from sources like US.· China’s base oils supply shows signs of rising even with delayed restart of some plants.· China’s lower Group II price premium vs domestic diesel could incentivize refiners to extend further any plant shutdowns or run-cuts.· Asia's Group I supply set to remain tighter following plant closure in Japan, slowdown in shipments from Europe in Nov 2023..· South Korea’s October base oils output holds steady for third month..· Base oils output stays lower than in Jan-Aug 2022.· Steady output at lower levels could point to moves to avoid build-up of surplus supplies.· Any extension of such a strategy could put pressure on output to fall following scheduled restart of Taiwan’s Group II unit in 1H Dec 2023..· Japan’s October base oils output falls to eight-month low following closure of another Group I base oils plant in the country..· Drop in output likely to be permanent unless other base oils plants boost run-rates.· Japan’s lower base oils output cuts country’s and region’s Group I supply.· Repercussions of drop in supply already extend to Europe, which is moving more Group I supplies to Asia.· Trend likely to continue well into next year until or unless blenders replace Group I supplies with alternative base oils grades. .· Singapore’s base oils imports from Japan halt in four weeks to end-Nov 2023..· Pause in shipments reflects change in trade flows following plant closure in Japan in Oct 2023.· Singapore’s base oils imports from Italy also halt in four weeks to end-Nov 2023.· Rise in supplies from Italy in Oct 2023 had helped to cushion slowdown in shipments from Japan.· Singapore could face tighter Group I supply unless more shipments arrive from Italy or other sources..· Thailand’s October base oils exports fall from two-year high in Sept 2023.· Lower volumes point to more limited surplus supply and more muted pressure to clear the surplus.· Thailand’s base oils exports rise 45pc in first ten months of 2023 yoy..· Shipments surge this year even before closure of Group I plant in Japan.· Surge in shipments this year could curb Thailand’s room to increase Group I exports even more.· Prospect of revival in Thailand’s domestic lube demand could instead cut the flow of exports.· Any such move would tighten further the availability of Group I base oils in the Asia-Pacific region..· Vietnam’s base oils imports from Singapore and South Korea are level-pegging in first ten-months of 2023..· Singapore had previously been Vietnam’s largest supplier.· South Korea’s growing share of Vietnam’s base oils market points to more intense competition for the country’s market.· Competition contrasts with Singapore’s growing market share of Indonesia’s market, South Korea’s growing share of Philippines’ market..· India’s October base oils supply outpaces domestic demand for first time in three months..· Surplus supply helps to replenish blenders’ stocks and cover expected seasonal rise in demand during Q4 2023.· Surplus supply could widen further in Nov 2023 amid signs of strong pick-up in imports from sources like South Korea and US.· Any sustained rise in surplus supply would likely prompt blenders to curb their urgency to lock in more supplies and to target even more competitive prices for any additional volumes..· Pakistan’s base oils supply holds steady at lower level in Q3 2023 even as lube demand rises..· Supply stays lower even as base oils imports recover.· Trend points to firmer demand for overseas supplies, lower demand for domestic Group I supplies.· Firmer demand for premium-grade base oils, and any extension of recovery in domestic lube demand, raises prospect of requirements for even more supplies from South Korea..Asia base oils - week of Dec 4: Demand outlook.Global base oils - week of Dec 4: Price outlook - margins.Global base oils - week of Dec 4: Price outlook - arbitrage.Global base oils - week of Dec 4: Demand outlook
· Asia’s base oils supply set to get boost following recent/imminent completion of plant-maintenance in Japan/Taiwan.· Asia’s supply set to get further boost from steady flow of arbitrage shipments from US.· Pick-up in shipments of premium-grade base oils from Mideast Gulf to India would add to supplies in that market.· Expected pick-up in regional demand in Q1 2024 would absorb some of the rise in supply.· Asia’s surplus supply could have more difficulty going to Americas market amid more competitive US prices.· Any signs of rise in surplus volumes in Asia would increase need to close the arbitrage to the region from sources like US.· China’s base oils supply shows signs of rising even with delayed restart of some plants.· China’s lower Group II price premium vs domestic diesel could incentivize refiners to extend further any plant shutdowns or run-cuts.· Asia's Group I supply set to remain tighter following plant closure in Japan, slowdown in shipments from Europe in Nov 2023..· South Korea’s October base oils output holds steady for third month..· Base oils output stays lower than in Jan-Aug 2022.· Steady output at lower levels could point to moves to avoid build-up of surplus supplies.· Any extension of such a strategy could put pressure on output to fall following scheduled restart of Taiwan’s Group II unit in 1H Dec 2023..· Japan’s October base oils output falls to eight-month low following closure of another Group I base oils plant in the country..· Drop in output likely to be permanent unless other base oils plants boost run-rates.· Japan’s lower base oils output cuts country’s and region’s Group I supply.· Repercussions of drop in supply already extend to Europe, which is moving more Group I supplies to Asia.· Trend likely to continue well into next year until or unless blenders replace Group I supplies with alternative base oils grades. .· Singapore’s base oils imports from Japan halt in four weeks to end-Nov 2023..· Pause in shipments reflects change in trade flows following plant closure in Japan in Oct 2023.· Singapore’s base oils imports from Italy also halt in four weeks to end-Nov 2023.· Rise in supplies from Italy in Oct 2023 had helped to cushion slowdown in shipments from Japan.· Singapore could face tighter Group I supply unless more shipments arrive from Italy or other sources..· Thailand’s October base oils exports fall from two-year high in Sept 2023.· Lower volumes point to more limited surplus supply and more muted pressure to clear the surplus.· Thailand’s base oils exports rise 45pc in first ten months of 2023 yoy..· Shipments surge this year even before closure of Group I plant in Japan.· Surge in shipments this year could curb Thailand’s room to increase Group I exports even more.· Prospect of revival in Thailand’s domestic lube demand could instead cut the flow of exports.· Any such move would tighten further the availability of Group I base oils in the Asia-Pacific region..· Vietnam’s base oils imports from Singapore and South Korea are level-pegging in first ten-months of 2023..· Singapore had previously been Vietnam’s largest supplier.· South Korea’s growing share of Vietnam’s base oils market points to more intense competition for the country’s market.· Competition contrasts with Singapore’s growing market share of Indonesia’s market, South Korea’s growing share of Philippines’ market..· India’s October base oils supply outpaces domestic demand for first time in three months..· Surplus supply helps to replenish blenders’ stocks and cover expected seasonal rise in demand during Q4 2023.· Surplus supply could widen further in Nov 2023 amid signs of strong pick-up in imports from sources like South Korea and US.· Any sustained rise in surplus supply would likely prompt blenders to curb their urgency to lock in more supplies and to target even more competitive prices for any additional volumes..· Pakistan’s base oils supply holds steady at lower level in Q3 2023 even as lube demand rises..· Supply stays lower even as base oils imports recover.· Trend points to firmer demand for overseas supplies, lower demand for domestic Group I supplies.· Firmer demand for premium-grade base oils, and any extension of recovery in domestic lube demand, raises prospect of requirements for even more supplies from South Korea..Asia base oils - week of Dec 4: Demand outlook.Global base oils - week of Dec 4: Price outlook - margins.Global base oils - week of Dec 4: Price outlook - arbitrage.Global base oils - week of Dec 4: Demand outlook
