Asia’s lube demand faces a seasonal slowdown over the coming months, joining other key markets with a simultaneous dip in consumption.Demand then faces a similar synchronized recovery from early next year.Asia's lube consumption is likely to fall to less than 2.33 million tonnes in the final three months of the year, from around 2.40 million tonnes in the third quarter, according to the Baseoilnews short-term outlook.Demand is then likely to recover more strongly from around the middle of the first quarter of next year.The fall in demand in Asia and other major markets at year-end, followed by a recovery in consumption early next year, creates a challenge for refiners as they seek to minimize a build-up of surplus supplies.The fall and then recovery in demand boosts the attraction of locking in some of those surplus base oils supplies in anticipation of the subsequent pick-up in consumption.The lack of any major tools to manage the future price-exposure for the surplus supplies leaves buyers reliant on outright prices trending higher to cover that risk.The reliance on a rise in outright prices deters most buyers from seeking additional volumes.Any build-up of surplus cargoes in Asia could be smaller than usual this year as plant maintenance at the start of the fourth quarter tightens regional supply.The planned closure of a base oils plant in China is also set to cut further the region’s Group I base oils production capacity.The arbitrage to move any surplus cargoes from US to Asia also remains shut for now.An opening of that arbitrage and any subsequent pick-up in supplies would likely have more of an impact on the Asia market from early next year..Latam lube demand faces year-end slowdown.Thailand’s August lube demand falls
Asia’s lube demand faces a seasonal slowdown over the coming months, joining other key markets with a simultaneous dip in consumption.Demand then faces a similar synchronized recovery from early next year.Asia's lube consumption is likely to fall to less than 2.33 million tonnes in the final three months of the year, from around 2.40 million tonnes in the third quarter, according to the Baseoilnews short-term outlook.Demand is then likely to recover more strongly from around the middle of the first quarter of next year.The fall in demand in Asia and other major markets at year-end, followed by a recovery in consumption early next year, creates a challenge for refiners as they seek to minimize a build-up of surplus supplies.The fall and then recovery in demand boosts the attraction of locking in some of those surplus base oils supplies in anticipation of the subsequent pick-up in consumption.The lack of any major tools to manage the future price-exposure for the surplus supplies leaves buyers reliant on outright prices trending higher to cover that risk.The reliance on a rise in outright prices deters most buyers from seeking additional volumes.Any build-up of surplus cargoes in Asia could be smaller than usual this year as plant maintenance at the start of the fourth quarter tightens regional supply.The planned closure of a base oils plant in China is also set to cut further the region’s Group I base oils production capacity.The arbitrage to move any surplus cargoes from US to Asia also remains shut for now.An opening of that arbitrage and any subsequent pick-up in supplies would likely have more of an impact on the Asia market from early next year..Latam lube demand faces year-end slowdown.Thailand’s August lube demand falls