Singapore’s domestically-produced base oils exports extended their fall in the four weeks to 4 February, dipping to the lowest level in three months despite a recent rise in the island-state’s base oils production capacity.

Total exports from domestic refiners slipped to around 120,000 tonnes, down from more 135,000 tonnes in the four weeks to end-January and the lowest since early November, Enterprise Singapore data showed.

The drop in domestic exports increased Singapore’s reliance on re-exports of base oils sourced from overseas markets to cover a larger share of its total shipments.

Key Highlights

·         Re-exports stayed in a narrow range, holding close to their highest level since early July.

·         Re-exports accounted for 22% of Singapore’s total exports, the highest share since last August.

·         Total exports fell to a one-month low, with shipments to China rising, flows to southeast Asia holding in a narrow range, and exports to India dipping after a one-month rebound.

·         Another cargo from China arrived, boosting four-week inflows from that market to the highest in more than four years.

Market Repercussions

The steady slide in Singapore’s domestic base oil exports since mid-December suggested the downward trend was more than a brief blip and began less than three months after the start-up of a new base oils unit in the city-state.

The slowdown coincided with the shipment and recent arrival of a large cargo from the Netherlands.

The timing suggested the cargo could have been intended more to bolster local supply rather than clear surplus volumes from Europe.