· Asia’s base oils demand likely to stay mixed, with steady buying interest in southeast Asia and India and more muted demand from China for overseas supplies.· Crude price volatility, expectations of easing supply-tightness, and seasonal slowdown in lube consumption likely to incentivize buyers to maintain sufficient stocks to cover immediate requirements..· China’s base oils demand for domestic supplies shows signs of being strong enough to absorb most of the country’s rising output of premium-grade base oils.· China’s domestic Group II base oils price premium to diesel prices holds in relatively narrow range since start of 2024, pointing to steady supply-demand fundamentals.· Dynamic adds to signs that domestic supply is likely to expand its share of country’s requirements at expense of imported supplies.· China’s demand for overseas supplies could focus more on Group I base oils as domestic output covers growing share of country’s premium-grade requirements.· China’s Group II price premium to FOB NE Asia prices for imported domestic supplies falls to lowest in more than three months..· Sliding price premium boosts attraction for supplies from Taiwan to target other markets rather than China. .· Singapore’s base oils exports show signs of holding steady to southeast Asia, China and India in Oct 2024 vs previous month..· Steady exports would curb opportunity for buyers in southeast Asia to procure additional supplies to replenish stocks.· Steady exports would curb opportunity for buyers in India to secure additional volumes to compensate for expected drop in shipments from South Korea..· Japan’s base oils exports to southeast Asia fall in Sept 2024 to second lowest in more than a decade, compounding drop in shipments to the region..· Fall in Japan’s base oils exports to southeast Asia likely to have largest impact on Group I supplies.· Drop in Group I shipments boosts importance of supplies from other key sources such as Thailand.· Southeast Asia’s focus on Thailand for Group I supplies shows signs of cutting availability from the country for other regions. · Drop in Asia’s base oils exports to southeast Asia in Aug-Sept 2024 should support steadier requirements in Q4 2024 as buyers seek to replenish low stocks..· Japan’s base oils/lube demand sees seasonal pick-up in Sept 2024 from previous month but falls for third time in four months from year-earlier levels..· Weaker demand mirrors similar slowdown in South Korea, raises prospect of deepening seasonal dip in consumption in northeast Asia in Q4 2024.· Weaker demand in northeast Asia would partially cushion impact of tighter supply in Asia at start of Q4 2024..· India’s demand for overseas base oils supplies likely to hold firm over coming weeks.· CFR India Group II light/heavy-grade price premium to FOB NE Asia prices stays wider, pointing to still-firm buying interest..· India’s lower domestic base oils output in Sept 2024 complicates blenders’ moves to replenish stocks ahead of seasonal pick-up in demand in Q4 2024.· India’s base oils supply almost matches demand in Sept 2024 on back of rebound in imports..· Supply still lags demand for seventh month in Sept 2024 amid unexpected drop in domestic output.· Supply-demand balance likely to remain tight until South Korea’s base oils exports return to normal, and/or domestic demand eases..· CFR India N70 premium to Singapore gasoil surges in two months to early-Sept 2024, ahead of start of plant maintenance work in South Korea in Sept 2024..· CFR India N70 premium slides since early-Sept 2024, stays lower in early Nov 2024.· Lower premium precedes expected completion of plant maintenance work in South Korea by end-Oct 2024.· Lower premium could point to expectations of improvement in Group II base oils supplies over coming weeks, easing recent tightness..Japan’s Sept base oils supply stays low.Asia base oils supply outlook: Week of 28 Oct
· Asia’s base oils demand likely to stay mixed, with steady buying interest in southeast Asia and India and more muted demand from China for overseas supplies.· Crude price volatility, expectations of easing supply-tightness, and seasonal slowdown in lube consumption likely to incentivize buyers to maintain sufficient stocks to cover immediate requirements..· China’s base oils demand for domestic supplies shows signs of being strong enough to absorb most of the country’s rising output of premium-grade base oils.· China’s domestic Group II base oils price premium to diesel prices holds in relatively narrow range since start of 2024, pointing to steady supply-demand fundamentals.· Dynamic adds to signs that domestic supply is likely to expand its share of country’s requirements at expense of imported supplies.· China’s demand for overseas supplies could focus more on Group I base oils as domestic output covers growing share of country’s premium-grade requirements.· China’s Group II price premium to FOB NE Asia prices for imported domestic supplies falls to lowest in more than three months..· Sliding price premium boosts attraction for supplies from Taiwan to target other markets rather than China. .· Singapore’s base oils exports show signs of holding steady to southeast Asia, China and India in Oct 2024 vs previous month..· Steady exports would curb opportunity for buyers in southeast Asia to procure additional supplies to replenish stocks.· Steady exports would curb opportunity for buyers in India to secure additional volumes to compensate for expected drop in shipments from South Korea..· Japan’s base oils exports to southeast Asia fall in Sept 2024 to second lowest in more than a decade, compounding drop in shipments to the region..· Fall in Japan’s base oils exports to southeast Asia likely to have largest impact on Group I supplies.· Drop in Group I shipments boosts importance of supplies from other key sources such as Thailand.· Southeast Asia’s focus on Thailand for Group I supplies shows signs of cutting availability from the country for other regions. · Drop in Asia’s base oils exports to southeast Asia in Aug-Sept 2024 should support steadier requirements in Q4 2024 as buyers seek to replenish low stocks..· Japan’s base oils/lube demand sees seasonal pick-up in Sept 2024 from previous month but falls for third time in four months from year-earlier levels..· Weaker demand mirrors similar slowdown in South Korea, raises prospect of deepening seasonal dip in consumption in northeast Asia in Q4 2024.· Weaker demand in northeast Asia would partially cushion impact of tighter supply in Asia at start of Q4 2024..· India’s demand for overseas base oils supplies likely to hold firm over coming weeks.· CFR India Group II light/heavy-grade price premium to FOB NE Asia prices stays wider, pointing to still-firm buying interest..· India’s lower domestic base oils output in Sept 2024 complicates blenders’ moves to replenish stocks ahead of seasonal pick-up in demand in Q4 2024.· India’s base oils supply almost matches demand in Sept 2024 on back of rebound in imports..· Supply still lags demand for seventh month in Sept 2024 amid unexpected drop in domestic output.· Supply-demand balance likely to remain tight until South Korea’s base oils exports return to normal, and/or domestic demand eases..· CFR India N70 premium to Singapore gasoil surges in two months to early-Sept 2024, ahead of start of plant maintenance work in South Korea in Sept 2024..· CFR India N70 premium slides since early-Sept 2024, stays lower in early Nov 2024.· Lower premium precedes expected completion of plant maintenance work in South Korea by end-Oct 2024.· Lower premium could point to expectations of improvement in Group II base oils supplies over coming weeks, easing recent tightness..Japan’s Sept base oils supply stays low.Asia base oils supply outlook: Week of 28 Oct
