US September exports to Africa stay low

US base oils exports to Africa stayed low in September amid signs of improving availability of supply in other markets.

Base oils exports of 37,960bl (5,350t) in September rose from less than 2,500bl the previous month, government data showed.

The volume was still the second lowest in seven months and down from average volumes of close to 150,000bl in the first seven months of the year.

There were no supplies to Nigeria for the first time since end-2020.

The higher shipments in the first half of the year were atypical. The lower exports in August and September were lower than usual but closer to more typical levels.

The surge in shipments in the first seven months of the year had helped to cover for a sharp drop in supplies from Europe and Russia.

Those markets are typically the main suppliers for West Africa especially.

Exports from Europe slowed because of unexpectedly tight availability in the region in the first half of the year.

The tightness eased from the start of the third quarter as regional demand slowed and supply rose.

Improving availability and lower prices for European supplies cut the attraction of procuring higher-priced shipments from the US.

The slowdown in shipments from the US to West Africa showed signs of extending into October.

A pick-up in supplies from the US to Nigeria in November likely reflected more competitive prices for the shipments compared with recent months.

Almost all the US shipments to Africa in September moved to South Africa.

US exports to that market were more regular compared with West Africa, where a large portion of flows consisted of spot shipments.

Even US shipments to South Africa faced competition from rising supplies from other sources like Netherlands and Saudi Arabia.

Rising shipments from those two markets to South Africa this year contrasted with a 37pc fall in exports from the US to the African country in the first nine months of the year.

Lower US base oils production in the third quarter helped to counter the impact of falling shipments to markets like Africa during that period.

The impact was likely to be larger once US production recovered to more typical levels.