Singapore’s base oils exports rose in March to the highest in more than two years, adding to a pick-up in shipments from Asia’s largest exporters and building regional stocks before supply disruptions began to feed through.

The island-state’s total exports rose to 203,000 tonnes in March, up from 180,000 tonnes in February to the highest since August 2023, Enterprise Singapore data showed.

The increase mirrored stronger March shipments from South Korea and Taiwan, reflecting planned supply programmes aligned with seasonal demand patterns and ahead of disruptions that began to emerge from end-February.

The higher volumes left blenders with a larger buffer against the immediate impact of those disruptions.

Key Highlights

·         Singapore’s March exports to China rose to a three-year high, with flows to Southeast Asia at a six-month high and to India at a four-month high.

·         Combined shipments to China from Asia’s largest exporters rose to the highest since January 2024, with shipments to India the highest in three months and to Southeast Asia the highest in two months.

·         India’s share of those exports rose in March, contrasting with a fall in the share of shipments bound for China and Southeast Asia.

Market Repercussions

The rise in regional base oils exports in March delayed the visible impact of supply disruptions into the second quarter of the year as higher shipments built inventories across key Asian markets.

Stronger inflows to China, combined with the country’s pick-up in domestic output in recent months, left it better placed to absorb any drop in base oils supply over the coming months.

The rebound in flows to India could also limit the immediate impact of supply disruptions on that market.

The more muted rise in shipments to Southeast Asia, and its smaller share of total exports, left that region with a smaller buffer and more exposed to any slowdown in supply.