· Asia’s base oils supply likely to stay balanced amid rise in output in China, rising exports from South Korea.· Rise in supplies balances out ongoing pause in exports from Taiwan because of Group II plant maintenance work.· Asia Group II price discount to Europe stays much narrower than in Q4 2023, pointing to less pressure to move supplies to more distant markets.· Asia’s Group I supplies face adjustment following closure of base oils plant in Japan in Oct 2023.· Plant closure shows signs of triggering pick-up in Group I base oils shipments from Europe to Asia.· China’s base oils supply could continue to trend higher amid firmer margins, weaker diesel values, recent start-up of new capacity..· China’s base oils output rises to nineteen-month high in October following recent start-up of new Group III base oils unit..· China’s higher Group III base oils supply likely to cover more of country’s domestic requirements.· Trend could curb demand for Group III base oils from overseas sources.· China’s rising Group I base oils output could similarly impact demand for overseas supplies..· Thailand’s September base oils exports rise to two-year high.· Wave of shipments helps to cut Thailand’s supply surplus.· Wave of arbitrage shipments from Thailand to UAE and India contrast with smaller volumes to China..· Trend reflects changing demand dynamics in Asia and lack of surplus Group I supplies in Europe.· Trend could change following closure of Group I base oils unit in Japan in Oct 2023.· Plant closure could boost regional demand for supplies from other sources in Asia like Thailand..· Japan’s September base oils supply rises to five-month high amid pick-up in output ahead of the plant closure..· Japan’s higher-than-usual base oils output throughout this year could reflect moves to build stocks ahead of plant closure.· Japan’s net supply still falls in September for first time in six months and by largest volume in a year..· Drop in net supply speeds up fall in Japan’s base oils inventories to eighteen-month low..· Falling inventories highlight speed of consumption of surplus supplies even with higher output.· Impact of plant closure in Oct 2023 likely to be felt more quickly in face of lower inventories..· Trade flows already show signs of adjusting in response to plant closure.· Singapore’s base oils imports from Italy surge in last four weeks to highest in more than two years..· Thailand’s September base oils output falls to seven-month low even as Asia-Pacific region readies for structurally tighter Group I supplies..· Thailand’s lower base oils output follows slump in Asia Group I base oil margins in Q3 2023.· Prospect of tighter Group I supply in Asia suggests prices will need to be at levels that incentivize rather than deter base oils production..· India’s September base oils supply falls to seven-month low amid lower domestic output, steady imports..· India’s lower base oils supply contrasts with firm demand..Global base oils - week of Nov 6: Price outlook - arbitrage
· Asia’s base oils supply likely to stay balanced amid rise in output in China, rising exports from South Korea.· Rise in supplies balances out ongoing pause in exports from Taiwan because of Group II plant maintenance work.· Asia Group II price discount to Europe stays much narrower than in Q4 2023, pointing to less pressure to move supplies to more distant markets.· Asia’s Group I supplies face adjustment following closure of base oils plant in Japan in Oct 2023.· Plant closure shows signs of triggering pick-up in Group I base oils shipments from Europe to Asia.· China’s base oils supply could continue to trend higher amid firmer margins, weaker diesel values, recent start-up of new capacity..· China’s base oils output rises to nineteen-month high in October following recent start-up of new Group III base oils unit..· China’s higher Group III base oils supply likely to cover more of country’s domestic requirements.· Trend could curb demand for Group III base oils from overseas sources.· China’s rising Group I base oils output could similarly impact demand for overseas supplies..· Thailand’s September base oils exports rise to two-year high.· Wave of shipments helps to cut Thailand’s supply surplus.· Wave of arbitrage shipments from Thailand to UAE and India contrast with smaller volumes to China..· Trend reflects changing demand dynamics in Asia and lack of surplus Group I supplies in Europe.· Trend could change following closure of Group I base oils unit in Japan in Oct 2023.· Plant closure could boost regional demand for supplies from other sources in Asia like Thailand..· Japan’s September base oils supply rises to five-month high amid pick-up in output ahead of the plant closure..· Japan’s higher-than-usual base oils output throughout this year could reflect moves to build stocks ahead of plant closure.· Japan’s net supply still falls in September for first time in six months and by largest volume in a year..· Drop in net supply speeds up fall in Japan’s base oils inventories to eighteen-month low..· Falling inventories highlight speed of consumption of surplus supplies even with higher output.· Impact of plant closure in Oct 2023 likely to be felt more quickly in face of lower inventories..· Trade flows already show signs of adjusting in response to plant closure.· Singapore’s base oils imports from Italy surge in last four weeks to highest in more than two years..· Thailand’s September base oils output falls to seven-month low even as Asia-Pacific region readies for structurally tighter Group I supplies..· Thailand’s lower base oils output follows slump in Asia Group I base oil margins in Q3 2023.· Prospect of tighter Group I supply in Asia suggests prices will need to be at levels that incentivize rather than deter base oils production..· India’s September base oils supply falls to seven-month low amid lower domestic output, steady imports..· India’s lower base oils supply contrasts with firm demand..Global base oils - week of Nov 6: Price outlook - arbitrage