Singapore’s base oils imports rose sharply in the four weeks to 28 January, reaching the highest level in over two months, boosted by a wave of shipments from the Netherlands and China.

Total imports of close to 55,000 tonnes were the highest since mid-November, Enterprise Singapore data showed.

The volume rebounded from 31,000 tonnes the previous week, which was close to the lowest in more than a year.

Imports got a boost from the arrival of the largest shipment from the Netherlands in almost three years.

The cargo moved to the region despite Asia’s healthy availability of supply, Singapore’s recent expansion of base oils production capacity, and higher Group II prices in Europe compared with Asia.

Key Highlights

·         Imports in the week to 28 January rose to the highest in at least four years, boosted by the Netherlands cargo.

·         Imports got additional support from the arrival of more supplies from China, boosting its four-week shipments to the highest since November 2023.

·         Four-week exports remained firm, with steady flows to Southeast Asia, rising shipments to India, and an ongoing slowdown to China.

Market Repercussions

The Netherlands shipment was unusual given Singapore’s high Group II production, as well as strong run-rates in other Asian markets such as South Korea and Taiwan.

The shipment could signal unexpected production issues.

It could alternatively point to a strategic move to clear surplus volumes from Europe.

The shipment likely loaded from Europe in the first half of December, when regional demand faced a seasonal slowdown, Group I and Group III availability was tighter than usual, and Group II supply more plentiful.

Asia’s firm demand growth, especially relative to other markets, added to the attraction of moving surplus volumes to the region.