US' Aug base oils exports to Europe fall

US base oils exports to Europe slumped in August, just a month after rising close to a record high.

Exports of 203,130bl (28,610t) in August fell from more than 710,000bl in July, government data showed.

The August volume was the lowest in six months. The July volume had been the second highest in more than a decade.

The trend extended a pattern since May of surging then slumping US exports to Europe.

The effect was a drop in total exports to Europe to 3.94mn bl in the first eight months of the year, down from 3.96mn bl during the same period in 2021.

Shipment volumes failed to reach any record levels during that period in 2021. They instead held in a relatively steady and narrow range.

The volatility of export volumes to Europe this year partly reflected the impact of plant maintenance at a US base oils plant. The plant is a key source of supplies for the European market.

The volatility of domestic demand in the US this year added to the complication of maintaining steady exports.

The slowdown in shipments was timely.

European lube demand faced a seasonal slowdown during the third quarter of the year. Slowing economic growth compounded the slowdown.

Improving availability of base oils in Europe and lower prices curbed further any urgency for buyers to lock in supplies.

A sharper fall in Group I prices compared with Group II base oils also widened the discount of Group I to Group II. The trend boosted the incentive for blenders to use more Group I base oils in their lubricant formulations.

US base oils exports slumped in August to all the key European outlets for its supplies.

The outlier was Switzerland. Exports of almost 34,000bl to the country were the highest in more than six years and up from typical levels of less than 400 bl/month over the past year.