Supply holds at second-highest level in more than three years
Rising output in Asia counters dip in production in Americas
Supply likely fell in October on maintenance, production-issues
Global base oils supply stayed unusually high in September for a second month as strong production in Asia offset lower production in the Americas market.
Total supply held at over 2.90 million tonnes in September, slightly below August levels but still the second-highest volume in more than three years, government and industry data showed.
The sustained pick-up in supply increased the need for stronger demand or production adjustments to prevent a build-up of surplus supplies heading into the fourth quarter.
Planned plant-maintenance and unexpected production issues in October pointed to such a dip in global supply that month.
Lower supply coincided with rangebound base oils margins in US, Europe and Asia at the start of the fourth quarter.
The urgency for firmer demand in September was more pronounced in Asia, where output of more than 950,000 tonnes was the highest in fourteen months.
The region extended its recovery during the third quarter after a dip in output during the first half because of maintenance-shutdowns and operational disruptions.
The Americas faced less pressure from surplus volumes, with output falling over 100,000 tonnes from August to a five-month low.
Output slowed because of plant-maintenance work in the US and signs of production issues in Brazil.
Europe’s base oils supply remained elevated despite a slight decline mainly because of lower production in Italy and the Netherlands.