Global base oils exports to key markets in Africa held close to a nine-month low in June amid a simultaneous dip in supplies from US and Europe.A pick-up in shipments from other sources like Saudi Arabia cushioned the slowdown.That dynamic could become more frequent in the coming months as the expected start-up of new production capacity in the Middle East and Asia adds additional potential sources for buyers in Africa.Such a scenario could complicate the shipment of surplus supplies to Africa from the US especially.Base oils exports to Egypt, Nigeria, South Africa and Kenya combined held at less 75,000 tonnes in June, government and shipping data showed..The volume was similar to May and down from typical flows of around 85,000 tonnes/month over the past year.The supplies originated mostly from the US and Europe, as well as from other sources like Saudi Arabia and Argentina.Shipments from other sources typically account for less than 10% of total exports to those key markets in Africa.Their share of shipments in July instead rose to more than 27% of the total export volume..The higher share partly reflected a drop in shipments from Europe, as well as a slump in exports from the US to a thirteen-month low.It also reflected a rise in shipments from Saudi Arabia to South Africa and from Argentina to Nigeria.The fall in shipments from the US highlighted the role of markets like Nigeria as a key outlet for surplus supplies, with the volatility of flows reflecting the changing size of that surplus.The fall in shipments also pointed to weaker demand in Nigeria during the rainy season.Like the US, the recent pick-up in shipments from Argentina to West Africa could be more sporadic and linked to short-term arbitrage opportunities.Like Europe, the flow of shipments from Saudi Arabia to markets like South Africa is more regular.The expected rise in base oils production capacity in the coming months raises the prospect of a rise in supplies targeting spot buyers in markets like Nigeria and regular buyers in markets like South Africa.Such a scenario could increase further the share of shipments originating from other sources besides US and Europe..Global base oils exports to Middle East rise in July .US June base oils/lube exports fall.Base Oil News stories and analysis also available on ICIS platform
