In today’s briefing:
- EA: Defying Disinflationary Narratives
- CX Daily: China’s Factory Exodus Is Turning Vietnam Into the World’s Assembler
- Global base oils margins outlook: Week of 1 September
- Asia base oils supply outlook: Week of 1 September
- Asia base oils demand outlook: Week of 1 September
- Americas/EMEA base oils supply outlook: Week of 1 September
- Global base oils arb outlook: Week of 1 September
- Americas/EMEA base oils demand outlook: Week of 1 September
EA: Defying Disinflationary Narratives
- Dovish hopes for EA disinflation continue to be disappointed by resilient outcomes. The rise to 2.1% in August amid sticky core pressures is opposite to the dovish narrative.
- Euro appreciation’s disinflationary shock is being offset by domestic resilience, which was most surprising in Northern Europe. Our errors were relatively small and balanced.
- Ongoing upside surprises have defied recent consensus expectations of a drift down to 1.8%. The ECB faces broad upside news that should reassure it against cutting again.
CX Daily: China’s Factory Exodus Is Turning Vietnam Into the World’s Assembler
- Vietnam /Cover Story: China’s factory exodus is turning Vietnam into the world’s assembler
- SCO /: China pledges billions for new bank to expand Eurasian bloc’s clout
- Renewables /: Saudi power giant ACWA bets big on China’s renewable energy market
Global base oils margins outlook: Week of 1 September
- Global base oils prices hold firm versus feedstock/competing fuel prices.
- Margins hold firm at time of year when fundamentals are typically weaker.
- Firm margins incentivize refiners to maintain high base oils output.
Asia base oils supply outlook: Week of 1 September
- Asia’s base oils prices hold firm versus Singapore gasoil prices.
- Firm base oil margins so far in Q3 2025 point to fundamentals that remain sufficiently balanced and that curb need for lower output levels.
- Firm margins coincide with signs of relatively steady base oils output in early-Q3 2025 even after completion of most plant-maintenance work.
Asia base oils demand outlook: Week of 1 September
- Asia’s base oils demand could stay more cautious amid expectations of healthy availability of supply, concern about exposure to lower prices.
- Cautious buying would coincide with likely seasonal pick-up in lube consumption in coming weeks.
- Dynamic leaves blenders facing challenge of holding sufficient supplies to meet finished lube demand while maximising benefit of any further fall in base oils prices.
Americas/EMEA base oils supply outlook: Week of 1 September
- US base oils prices stay relatively firm and in narrow range vs vacuum gasoil prices.
- Steady base oils price-premium sustains incentive for refiners to maintain high output.
- Supply could get further boost if Atlantic hurricane season remains quiet, leaving market with untapped buffer stocks.
Global base oils arb outlook: Week of 1 September
- India’s imported Group II heavy-grade base oils cargo price-premium to FOB prices in US and Asia holds firm and in relatively narrow range in recent weeks.
- Price-spread stays in narrow range as CFR India cargo price tracks lower FOB Asia/US Gulf coast prices.
- CFR India cargo price falls amid pick-up in availability of supplies, boosting buyers’ choice.
Americas/EMEA base oils demand outlook: Week of 1 September
- US base oils demand could stay muted as buyers eye existing stocks to cover requirements.
- US base oils/lube consumption fell in month of September from August in three of previous four years, before rising in month of October.
- Repeat of that trend this year would leave buyers with shrinking window to work down existing stocks before slowdown in consumption gathers pace during final two months of 2025.
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