Argentina’s base oils supply stayed unusually high for a third month in October as a wave of arbitrage shipments continued to move to the country.The surge in base oils imports since August accounted for almost all of Argentina’s supplies. The rise in shipments coincided with a sharp fall in the country’s domestic base oils production.Sellers in the Mideast Gulf and Asia-Pacific were key beneficiaries of the shipments to Argentina as they took advantage of an open arbitrage to clear surplus volumes from their region.They also benefited from higher prices for supplies of US origin that curbed their competitiveness versus arbitrage shipments from those more distant markets.Argentina’s base oils imports of more than 19,300mᶟ (17,140t) in October was up from around 18,200mᶟ the previous month and down from 20,610mᶟ in August, government data showed..The import volumes in those three months were the highest in more than seven years.Before August, the country’s base oils imports had typically come to less than 7,000mᶟ over the previous twelve months.The US is typically the largest source of Argentina's overseas supplies.The trend changed from August. The Mideast Gulf was the largest source of supplies that month and in September.South Korea was the largest source of the October supplies.The rise in shipments from the Mideast Gulf to Argentina coincided with an increase in supplies of Russian origin moving to that market in recent months.The rise in shipments from South Korea to Argentina coincided with unusually low Asia-Pacific Group II prices relative to US prices, mostly because of weak Chinese demand.The arbitrage flows highlighted the impact on the Americas market of events taking place in more distant regions.They also highlighted the steep discount of prices in those other markets compared with prices in the Americas region.The shipments likely had a larger impact on base oils production in Argentina than on the flow of supplies from the US.Argentina’s base oils output held close to or below 1,000mᶟ in each of the three months to October. The volume was down from typical levels of more than 7,000 mᶟ/month in the year to July.Argentina’s imports from the US held relatively steady in the three months to October. A dip in imports in September followed a slump in US base oils production the previous month.The trend suggested that any surplus US supplies targeting Argentina at year-end could face competition from arbitrage shipments from other regions.But the more regular flow of supplies from the US was relatively unaffected..S Korea Sept exports to Americas rise
