S Korea’s May base oil exports to Americas rise

South Korea’s base oil exports to the Americas rose in May to a four-month high amid firm demand in the US for Group III base oils, and in Latin America for arbitrage supplies.

Total exports of 76,770t to the Americas in May rose from 56,030t in April and more than doubled from year-earlier levels.

The volume was higher than typical levels of around 65,000 t/month over the past year.

Exports of 310,830t in the first five months of the year were up 33pc from 233,080t during the same period last year.

The surge in supplies from year-earlier levels partly reflected the more balanced Group III supply-demand fundamentals this year.

Group III plant maintenance has been relatively limited so far this year. A raft of maintenance work took place during the first half of last year.

The lighter round of maintenance has freed up more shipments to move to the Americas instead of to Europe.

South Korea’s base oil exports to that market slumped in the first five months of this year compared with last year.

Higher US Group III base oil prices relative to Europe also incentivized producers to maximise shipments to the US once they had covered their term commitments.

A pick-up in shipments to Latin America similarly reflected firm demand for premium-grade base oils.

The steep discount of fob Asia Group II base oils to US prices made the arbitrage feasible and added to the attraction of securing cargoes from suppliers like South Korea.