· Asia’s base oils demand could turn more muted as prospect of slowing consumption and improving supply curbs urgency to lock in additional volumes..· High base oils values relative to feedstock and competing prices point to tighter supply-demand dynamics.· Asia’s lube demand instead likely to stay lower at year-end and start of 2025..· Seasonal slowdown in demand and signs of weaker consumption add to attraction for blenders to maintain lower stocks and to procure smaller volumes more frequently.· Prospect of weaker demand and rising supply could raise expectations of adjustment in base oils prices to reflect the weaker fundamentals.· Those expectations could add to buyers’ preference to hold back, putting more pressure on demand.· China’s demand for overseas supplies likely to provide more limited support.· China’s premium of domestic prices for imported Group II base oils over FOB Asia cargo prices extends fall, adding to signs of more muted demand for overseas supplies..· Higher domestic base oils production in China gives domestic blenders the option of maintaining lower stocks until after the lunar new year holidays in Feb 2025.· Blenders could tap domestic supplies to cover any signs of stronger-than-expected demand.· Still-firm base oil values versus domestic diesel prices point to relatively steady demand so far..· Southeast Asia’s lube demand already shows signs of rising more slowly than usual in month of September from previous month.· Thailand’s lube demand falls in Sept 2024 for second month from year-earlier levels..· Weaker consumption in markets like Thailand triggers fall in Asia’s lube demand in Sept 2024 for third month from year-earlier levels..· Weaker lube demand cushions impact of drop in Asia’s base oils supply in Sept 2024.· Weaker lube demand, combined with seasonal slowdown in consumption in Q4 2024, adds to attraction for blenders to maintain lower stocks..· Singapore accounts for growing share of Thailand’s base oils imports in Sept 2024 and in Jan-Sept 2024..· Singapore’s share rises at expense of supplies from South Korea, whose share falls in 2024 to lowest in at least five years.· Thailand’s reliance on imports of premium-grade base oils for all its Group II/III requirements makes it a key market for Singapore and South Korea..· Buyers in India could start to get more leverage in coming weeks amid expectations of pick-up in shipments from South Korea following completion of plant maintenance work in the country.· More feasible arbitrage from US could also facilitate pick-up in shipments from that country to India..· Expectations of improving availability and subsequent price-pressure could prompt buyers to limit moves to replenish stocks.· Expectations of improving availability and downward price pressure could dampen interest in US supplies whose prices could be competitive currently, but less so by the time any shipments reached India.· Dynamic raises prospect of pick-up in demand for US supplies when buyers are more confident that prices have bottomed out.· Buyers face challenge of balancing expectations of lower prices with likely need to replenish low stocks..· India’s lube demand rises in Oct 2024 for sixth time in seven months..· Rising demand likely to keep India’s supply-demand balance tighter than usual..· Rising demand contrasts with signs of tighter supply in recent weeks as likely dip in flows from key sources like South Korea counter steady flows from Singapore and Saudi Arabia..· Drop in shipments, rising domestic demand and blenders’ lower stocks likely to sustain firm buying interest for additional supplies.· Moves to replenish stocks and expectations of lower prices could boost interest in supplies with a shorter time period between procurement and delivery of the shipments..· Pakistan’s base oils imports account for more than 72% of country’s supply in Sept 2024 for second time in a row, up from 66% share in 2023..· Imports’ share of Pakistan’s supply likely to hold firm or rise further if country’s economy extends recovery and lube demand rises.· Pakistan’s total reliance on overseas supplies for premium-grade base oils likely to add to demand for imports.· Pakistan’s imports of Group II heavy-grade base oils continue to account for growing share of country’s total imports in Sept 2024..· Pakistan’s rising demand for imports and rising demand for Group II heavy grades boosts incentive for overseas refiners to increase their share of the country’s shipments..China’s October base oils output rises.India’s October lube demand rises.Asia lube demand likely to improve in Q1.Asia’s September lube demand falls.Thailand’s September lube demand falls.Pakistan's Sept base oils imports fall
· Asia’s base oils demand could turn more muted as prospect of slowing consumption and improving supply curbs urgency to lock in additional volumes..· High base oils values relative to feedstock and competing prices point to tighter supply-demand dynamics.· Asia’s lube demand instead likely to stay lower at year-end and start of 2025..· Seasonal slowdown in demand and signs of weaker consumption add to attraction for blenders to maintain lower stocks and to procure smaller volumes more frequently.· Prospect of weaker demand and rising supply could raise expectations of adjustment in base oils prices to reflect the weaker fundamentals.· Those expectations could add to buyers’ preference to hold back, putting more pressure on demand.· China’s demand for overseas supplies likely to provide more limited support.· China’s premium of domestic prices for imported Group II base oils over FOB Asia cargo prices extends fall, adding to signs of more muted demand for overseas supplies..· Higher domestic base oils production in China gives domestic blenders the option of maintaining lower stocks until after the lunar new year holidays in Feb 2025.· Blenders could tap domestic supplies to cover any signs of stronger-than-expected demand.· Still-firm base oil values versus domestic diesel prices point to relatively steady demand so far..· Southeast Asia’s lube demand already shows signs of rising more slowly than usual in month of September from previous month.· Thailand’s lube demand falls in Sept 2024 for second month from year-earlier levels..· Weaker consumption in markets like Thailand triggers fall in Asia’s lube demand in Sept 2024 for third month from year-earlier levels..· Weaker lube demand cushions impact of drop in Asia’s base oils supply in Sept 2024.· Weaker lube demand, combined with seasonal slowdown in consumption in Q4 2024, adds to attraction for blenders to maintain lower stocks..· Singapore accounts for growing share of Thailand’s base oils imports in Sept 2024 and in Jan-Sept 2024..· Singapore’s share rises at expense of supplies from South Korea, whose share falls in 2024 to lowest in at least five years.· Thailand’s reliance on imports of premium-grade base oils for all its Group II/III requirements makes it a key market for Singapore and South Korea..· Buyers in India could start to get more leverage in coming weeks amid expectations of pick-up in shipments from South Korea following completion of plant maintenance work in the country.· More feasible arbitrage from US could also facilitate pick-up in shipments from that country to India..· Expectations of improving availability and subsequent price-pressure could prompt buyers to limit moves to replenish stocks.· Expectations of improving availability and downward price pressure could dampen interest in US supplies whose prices could be competitive currently, but less so by the time any shipments reached India.· Dynamic raises prospect of pick-up in demand for US supplies when buyers are more confident that prices have bottomed out.· Buyers face challenge of balancing expectations of lower prices with likely need to replenish low stocks..· India’s lube demand rises in Oct 2024 for sixth time in seven months..· Rising demand likely to keep India’s supply-demand balance tighter than usual..· Rising demand contrasts with signs of tighter supply in recent weeks as likely dip in flows from key sources like South Korea counter steady flows from Singapore and Saudi Arabia..· Drop in shipments, rising domestic demand and blenders’ lower stocks likely to sustain firm buying interest for additional supplies.· Moves to replenish stocks and expectations of lower prices could boost interest in supplies with a shorter time period between procurement and delivery of the shipments..· Pakistan’s base oils imports account for more than 72% of country’s supply in Sept 2024 for second time in a row, up from 66% share in 2023..· Imports’ share of Pakistan’s supply likely to hold firm or rise further if country’s economy extends recovery and lube demand rises.· Pakistan’s total reliance on overseas supplies for premium-grade base oils likely to add to demand for imports.· Pakistan’s imports of Group II heavy-grade base oils continue to account for growing share of country’s total imports in Sept 2024..· Pakistan’s rising demand for imports and rising demand for Group II heavy grades boosts incentive for overseas refiners to increase their share of the country’s shipments..China’s October base oils output rises.India’s October lube demand rises.Asia lube demand likely to improve in Q1.Asia’s September lube demand falls.Thailand’s September lube demand falls.Pakistan's Sept base oils imports fall
