Asia’s lube demand is likely to dip in December and stay lower early next year before a seasonal boost later in the first quarter of the year.The slowdown in demand curbs the urgency for blenders to replenish stocks after the region’s base oils supply tightened at the end of the third quarter and start of the fourth quarter of the year.Any moves to maintain lower inventories would then magnify the impact of an expected recovery in supply over the coming weeks.Asia’s lube demand is likely to recover to more than 2.27 million tonnes in the first three months of next year, from less than 2.17 million tonnes in the fourth quarter of this year, according to the Baseoilnews short-term outlook.The volume excludes China.Consumption in the fourth quarter would also be down from around 2.25 million tonnes in the third quarter of this year.Asia’s base oils prices held unusually firm relative to feedstock and competing fuel prices in the second and third quarters of the year as lower supply and steady demand limited any build-up of surplus volumes.Supply is likely to improve in the coming weeks following the recent completion of maintenance work on a key Group II base oils unit in South Korea.Demand faces a seasonal slowdown in the coming weeks, incentivizing blenders to maintain lower stocks.Weaker supply-demand fundamentals and still-firm base oils values relative to feedstock and competing prices could add to buyers’ preference to hold back..Thailand’s September lube demand falls.Asia base oils demand outlook: Week of 4 Nov
