US base oils imports fell in May as Group III shipments from the Middle East dipped to a five-month low.Base oils imports showed signs of improving in June before falling again in July.The protracted slowdown raised the prospect of tightening US availability of Group III base oils.The premium of US Group III base oils prices over Group II light-grade prices rose in early-June before holding steady.Even at the higher level, the premium remained unusually low despite the drop in supply from overseas markets.Weak prices and lower supply pointed to muted demand.Total base oils imports of 1.03 million barrels (145,000 tonnes) in May fell from 1.55 million barrels in April to a three-month low, government data showed..Group III supplies account for most of the US' base oils imports.Imports fell in May because of a drop in shipments from Group III refiners in the Middle East.Imports of 321,000 barrels from the region fell from more than 960,000 barrels in April and from typical levels of more than 630,000 barrels/month over the past year. Supplies from Qatar accounted for 80% of the May volume.Imports instead fell because of a simultaneous slump in shipments from Bahrain and the UAE, whose Group III base oils units underwent maintenance-work during the second quarter.A cargo loaded from the UAE in mid-April and reached the US in early-June.Except for that shipment, the plant shutdowns showed signs of curbing flows from the UAE and Bahrain to the US through the rest of the second quarter.Firm import volumes from South Korea in May partially balanced out the drop in supplies from the Middle East.But Group III plant-maintenance in the northeast Asia country during the second quarter raised the prospect of curbing flows from that market too.South Korea’s base oils exports to the US fell to a four-month low in May, reflecting such a dynamic.The prospect of lower Group III imports extending into the third quarter coincided with a rise in Group III base oils prices relative to Group II prices in June to their widest level in a year.Even with that rise, the Group III 4cSt price-premium to Group II light grades remained unusually low.US Group III prices similarly strengthened relative to Europe prices in first-half June. Even with that price-strength, they remained at a discount to Europe prices. The discount then began to widen again from second-half June..US’ May base oils exports rise.S Korea May base oils exports to US fall.US’ April base oils supply lags demand
