US’ Jan base oils imports fall

US base oils imports edged down in January at a time of year when domestic demand faced a seasonal slowdown.

The volume remained relatively firm as a steady flow of shipments from the Mideast Gulf countered a slowdown in supplies from Asia-Pacific.

The flow of shipments from Asia-Pacific showed signs of reviving in February.  

US Group III posted prices were cut in January and again in March in the face of steady supply and weaker demand during the winter months.

The prices remained at a steep premium to other base oils grades even after the price cuts. The firm prices reflected the US market’s rising consumption of Group III base oils.

The price-cuts in the first quarter of the year boosted the attraction of moving more premium-grade supplies to other markets like Europe.

Lower supplies from Asia and more competitive prices in Europe highlighted some of the repercussions of the US’ market’s reliance on imports to cover almost all of its Group III base oils requirements.

The steadier flows from the Mideast Gulf highlighted a benefit of that reliance on imports by spreading its supplies amongst a wider range of different sources in different regions of the world.

US base oils imports of 1.34mn bl (188,000t) in January fell from 1.45mn bl the previous month.

The volume rose for the fourth time in five months from year-earlier levels and was almost the same as average imports of 1.36mn bl/month over the past year.

Supplies from countries producing Group III base oils accounted for around 87pc of the total.

The slowdown in shipments from December mostly reflected a drop in supplies from South Korea.

The northeast Asian country’s base oils exports fell to a 31-month low in December before rebounding in January.

US imports from Indonesia also stayed lower than usual in January.

The southeast Asian country’s Group III base oils exports stayed much lower than typical levels for a sixth month in January.

US base oils imports from countries without Group III production capacity also fell in January, but more slowly.

There were no imports from Saud Arabia in January for the first time in seven months.

But the US continued to take delivery of a steady flow of shipments from the Netherlands.