Singapore's base oils exports fell to their lowest level in more than nine years in the four weeks to 10 June, but rising inflows from China and India pointed to surplus supply elsewhere in Asia that could erode Singapore’s market share.

Total exports fell to less than 92,000 tonnes, slipping from 106,000 tonnes the prior week to the lowest since at least 2017, Enterprise Singapore data showed.

The decline raised the prospect of tightening regional availability. Instead, the arrival of additional cargoes from China, Europe and India boosted the island-state’s supply.

The unusual trade flows reinforced signs that supply remained sufficient across much of Asia despite disruptions to base oils and feedstocks supply since end-February.

Key Highlights

·         Exports to China fell to their lowest level in more than nine years, reversing the surge in shipments seen during March.

·         Exports to Southeast Asia steadied near one-year lows, while exports to India remained close to their lowest levels since early 2024.

·         Imports included a second large cargo from China in as many weeks and another shipment from the Netherlands.

·         Imports from India rose to their highest level in more than nine years, an unusual development for a market that is typically a major importer.

Market Repercussions

The trade flows pointed to a regional market with sufficient supply despite disruptions that had temporarily masked that surplus.

China's output fell in May and shipments from Singapore dropped to a nine-year low. Rising flows back to Singapore added to signs of softer Chinese demand rather than tighter availability.

The cargo from India was even more unusual. The country has historically relied on imports from South Korea, Singapore and the Middle East to cover its large domestic shortfall. Shipments moving in the opposite direction pointed to sufficient domestic supply to create surplus volumes for export.

The result was an unusual inversion of normal trade patterns. Markets that were typically the destination for shipments from Singapore were increasingly moving supply back to the island-state.

The change in flows helped offset the impact of Singapore's production slowdown, but it also raised a longer-term risk.

A sustained decline in Singapore's exports, while other regional producers held output steady, would give buyers reason to diversify. Asia had been structurally well supplied before the end-February disruptions. The disruptions had obscured that surplus, not removed it.