US base oils imports fell to a seven-month low in March in the face of weak domestic demand, rising domestic Group III production and less competitive prices compared with other regions.The sustained drop in imports raised the prospect of more premium-grade shipments from sources like Asia and the Middle East targeting other markets instead.Europe could struggle to absorb any pick-up in shipments from those markets amid still-cautious lube consumption in the region.Lube demand in Asia-Pacific faced the prospect of a seasonal slowdown from around mid-year, complicating any additional flows to that region.Global Group III base oils prices already faced sustained pressure over most of the past year in response to weak supply-demand fundamentals.The lower prices could spur a pick-up in demand or drop in supply.The drop in US base oils imports partly reflected the impact of lower prices.Rising domestic Group III base oils output by contrast suggested that prices remained at levels that incentivized more production.US imports of 970,300 barrels (137,000 tonnes) in March fell from more than 1.12 million barrels in February and for an eleventh month from year-earlier levels, government data showed.Most of the supplies consisted of shipments from sources that are key producers of Group III base oils.Imports of more than 410,000 barrels from South Korea in March were the second-highest volume in eight months.The rise in shipments boosted US supplies ahead of maintenance work on a key Group III base oils unit in South Korea from mid-March.Imports of 119,000 barrels from the UAE in March boosted total shipments from the Middle East country to more than 455,000 barrels in the first quarter of the year.The quarterly volume was the highest in more than a year and coincided with a sustained slowdown in shipments from the UAE to Europe late last year and early this year.That dynamic showed signs of changing in the second quarter of the year amid a pick-up in flows from the UAE to Europe.A slump in US Group III base oils prices to a discount to Europe prices at the start of the second quarter of the year added to the attraction of moving more shipments to Europe. .US’ March base oils exports stay lower
