Singapore's base oils exports fell in the four weeks to 16 September, as an unusual and sustained surge in shipments to the US pulled supply away from the rest of Asia just as regional demand starts its seasonal recovery.

Total exports fell to less than 145,000 tonnes in the four weeks to 16 September, from more than 155,000 tonnes the previous week, Enterprise Singapore data showed.

Volumes held above 140,000 tonnes for a sixth straight week, after slipping below that level for more than two months before then.

Domestic exports moved in the opposite direction, extending their own recovery to 120,000 tonnes from 117,000 tonnes the previous week and the second-highest level in almost four months.

The rebound in domestic shipments, and their growing share of total exports, pointed to a more sustained pick-up in local supply. That reversed the pattern seen for much of the summer, just as regional demand began to recover.

But more of Singapore's cargoes are now moving to the US, limiting how much of the supply recovery reaches buyers elsewhere in Asia.

Key Highlights

·         Shipments to the US extended their unusual surge, reaching close to 40,000 tonnes and reversing the more typical flow from the US to Singapore seen in recent years.

·         Exports to Southeast Asia slumped to less than 50,000 tonnes, the lowest level since early June, when Singapore's domestic exports were at multi-year lows.

·         Exports to China also stayed well below typical levels, dipping back below 20,000 tonnes.

·         Exports to India were the exception, recovering to more than 20,000 tonnes from less than 10,000 tonnes in the first half of September, though still well below typical levels.

·         Total imports held steady at around 57,000 tonnes, well below the surge in volumes seen in June and July.

Market Repercussions

Singapore's recovering domestic exports would normally add to the supply available to Asian buyers as the region moves into its seasonal demand recovery. The continued rise in US-bound shipments is instead absorbing much of that additional availability.

The shift extended a pattern already visible last month in Taiwan and South Korea, where wider arbitrage windows drew a larger-than-usual share of cargoes to Europe and the Americas instead of the rest of Asia.

The additional exports reduced the volume of surplus supply remaining in the region, offsetting the impact of a seasonal summer slowdown.

The region is now entering its own seasonal demand pick-up with less surplus to draw on, ahead of plant maintenance work in Asia and further disruption to Middle East supply.