· Asia’s base oils demand would typically start to get support in the coming weeks from moves to lock in supplies for delivery before end of third quarter of the year.· Base oils availability shows signs of improving in recent weeks, curbing urgency to lock in additional supplies.· Lower crude prices and firmer base oils margins add to incentive to slow the pace of replenishment plans.· Domestic China and CFR India Group II price differential versus FOB NE Asia prices pauses or edges lower after strong recovery since late-May/early June 2024.· Pause in price recovery leaves arbitrage hard to work, suggests buyers remain wary about building larger stocks.· Recovery in domestic China Group II prices versus FOB NE Asia prices from late May 2024 to mid-July 2024 coincided with fall in domestic base oils output at end-Q2 2024.· Recovery in domestic China Group II prices versus FOB NE Asia prices from late May 2024 to mid-July 2024 boosted attraction of moving more regional shipments to China during that time.· Pause in price recovery could point to improvement in domestic supply and buyers' preference to limit any further stock-build for now. .· More feasible arbitrage in recent weeks coincides with rebound in Singapore’s base oils exports to China in July 2024, following signs of slowdown in shipments in June 2024..· Singapore’s base oils exports to southeast Asia also recover so far this month, pointing to signs of still-steady demand in the region..· Singapore’s bunker fuel sales see seasonal slowdown in June from previous month but still rise for sixth time in seven months from year-earlier levels.· Average bunker fuel sales per vessel fall in June from May, rise for seventh straight month from year-earlier levels..· Seasonal slowdown in Singapore’s bunker fuel consumption likely to impact marine lubricants demand and the base oils used to produce marine lubricants.· Sustained rise in bunker fuel sales from year-earlier levels points to firm base oils requirements compared with same time last year..· Steady-to-firm demand in Singapore adds to signs of firm consumption in southeast Asia through to end-Q2 2024.· South Korea’s base oils exports to southeast Asia hold firm in June 2024, contrasting with slump in total exports and in shipments to other key markets like India, China and Middle East..· Slowdown in exports to those other outlets coincides with weaker demand in those markets.· Firm exports to southeast Asia suggest demand remains steadier in that region..· Premium of CFR India Group II prices over FOB NE Asia prices holds steady, extending pause after recent recovery since early June 2024.· Pause in recovery leaves arbitrage hard to work, suggests buyers are comfortable to hold off for now.· Expectations of ready availability of supplies and recent dip in crude oil prices add to attraction of limiting speed of any stock-replenishment.· Lack of urgency to secure replenishment volumes coincides with signs of pick-up in shipments from South Korea, Taiwan and Singapore to India in July 2024.· A pick-up in shipments would follow slump in India’s base oils imports from Asia to eight-month low in June 2024..· Drop in shipments follows narrowing of CFR India Group II price premium to FOB NE Asia prices in April and May 2024.· Drop in imports suggests Asia’s refiners responded to squeezed arbitrage and lower demand by cutting India-bound shipments.· India’s Group II base oils imports duly fall to three-year low in June 2024..· Slump in Group II imports contrasts with rise in India’s lube demand in June 2024..· Diverging trends raise prospect of importers consuming faster the surplus supplies that built up in April-May 2024.· Signs of pick-up in shipments from Asia to India in July 2024 could help replenish those stocks over the coming weeks..· India’s Group III base oils imports rise in June 2024 from year earlier, contrasting with slump in imports of Group II base oils..· Firmer Group III imports coincide with prices for some of the supplies that are increasingly competitive vs Group II light and heavy-grade base oils.· Firmer Group III imports suggests competitive prices prompted buyers to procure more of those supplies instead of Group II base oils.· Trend suggests global surplus and competitive prices of Group III base oils are impacting Group II demand in growing number of markets..· India’s imports of very-light grade base oils extend rise in June 2024 from year earlier even as total imports fall..· Rising imports follow CFR India N70 premium to regional gasoil prices holding firm through to early June 2024.· Firm premium keeps open the arbitrage to move more shipments to India.· Firm import volumes could leave stocks of very light grades staying higher for longer, especially compared with Group II light and heavy grades.· Higher-for-longer stocks could delay timing of subsequent pick-up in demand for very-light-grade supplies.
· Asia’s base oils demand would typically start to get support in the coming weeks from moves to lock in supplies for delivery before end of third quarter of the year.· Base oils availability shows signs of improving in recent weeks, curbing urgency to lock in additional supplies.· Lower crude prices and firmer base oils margins add to incentive to slow the pace of replenishment plans.· Domestic China and CFR India Group II price differential versus FOB NE Asia prices pauses or edges lower after strong recovery since late-May/early June 2024.· Pause in price recovery leaves arbitrage hard to work, suggests buyers remain wary about building larger stocks.· Recovery in domestic China Group II prices versus FOB NE Asia prices from late May 2024 to mid-July 2024 coincided with fall in domestic base oils output at end-Q2 2024.· Recovery in domestic China Group II prices versus FOB NE Asia prices from late May 2024 to mid-July 2024 boosted attraction of moving more regional shipments to China during that time.· Pause in price recovery could point to improvement in domestic supply and buyers' preference to limit any further stock-build for now. .· More feasible arbitrage in recent weeks coincides with rebound in Singapore’s base oils exports to China in July 2024, following signs of slowdown in shipments in June 2024..· Singapore’s base oils exports to southeast Asia also recover so far this month, pointing to signs of still-steady demand in the region..· Singapore’s bunker fuel sales see seasonal slowdown in June from previous month but still rise for sixth time in seven months from year-earlier levels.· Average bunker fuel sales per vessel fall in June from May, rise for seventh straight month from year-earlier levels..· Seasonal slowdown in Singapore’s bunker fuel consumption likely to impact marine lubricants demand and the base oils used to produce marine lubricants.· Sustained rise in bunker fuel sales from year-earlier levels points to firm base oils requirements compared with same time last year..· Steady-to-firm demand in Singapore adds to signs of firm consumption in southeast Asia through to end-Q2 2024.· South Korea’s base oils exports to southeast Asia hold firm in June 2024, contrasting with slump in total exports and in shipments to other key markets like India, China and Middle East..· Slowdown in exports to those other outlets coincides with weaker demand in those markets.· Firm exports to southeast Asia suggest demand remains steadier in that region..· Premium of CFR India Group II prices over FOB NE Asia prices holds steady, extending pause after recent recovery since early June 2024.· Pause in recovery leaves arbitrage hard to work, suggests buyers are comfortable to hold off for now.· Expectations of ready availability of supplies and recent dip in crude oil prices add to attraction of limiting speed of any stock-replenishment.· Lack of urgency to secure replenishment volumes coincides with signs of pick-up in shipments from South Korea, Taiwan and Singapore to India in July 2024.· A pick-up in shipments would follow slump in India’s base oils imports from Asia to eight-month low in June 2024..· Drop in shipments follows narrowing of CFR India Group II price premium to FOB NE Asia prices in April and May 2024.· Drop in imports suggests Asia’s refiners responded to squeezed arbitrage and lower demand by cutting India-bound shipments.· India’s Group II base oils imports duly fall to three-year low in June 2024..· Slump in Group II imports contrasts with rise in India’s lube demand in June 2024..· Diverging trends raise prospect of importers consuming faster the surplus supplies that built up in April-May 2024.· Signs of pick-up in shipments from Asia to India in July 2024 could help replenish those stocks over the coming weeks..· India’s Group III base oils imports rise in June 2024 from year earlier, contrasting with slump in imports of Group II base oils..· Firmer Group III imports coincide with prices for some of the supplies that are increasingly competitive vs Group II light and heavy-grade base oils.· Firmer Group III imports suggests competitive prices prompted buyers to procure more of those supplies instead of Group II base oils.· Trend suggests global surplus and competitive prices of Group III base oils are impacting Group II demand in growing number of markets..· India’s imports of very-light grade base oils extend rise in June 2024 from year earlier even as total imports fall..· Rising imports follow CFR India N70 premium to regional gasoil prices holding firm through to early June 2024.· Firm premium keeps open the arbitrage to move more shipments to India.· Firm import volumes could leave stocks of very light grades staying higher for longer, especially compared with Group II light and heavy grades.· Higher-for-longer stocks could delay timing of subsequent pick-up in demand for very-light-grade supplies.