Singapore’s base oils exports fell as domestic shipments weakened and flows to China and India reached multi-year lows
Shipments to the US surged even as total exports declined, reducing supply available to buyers in traditional Asian markets
The shift, combined with volatile flows from other sources, increased pressure on South Korea to sustain elevated output and exports
Singapore’s base oils exports fell in the four weeks to 2 September, with a surge in shipments to the US compounding the slump in flows to key outlets in the Asia-Pacific region.
Total exports fell to around 150,000 tonnes from more than 165,000 tonnes in the four weeks to 26 August, Enterprise Singapore data showed. The decline partly reversed a recovery that had lifted exports from less than 120,000 tonnes in May and June.
The slowdown added to uncertainty over the strength and sustainability of the increase in Singapore’s exports, just weeks ahead of scheduled maintenance in Taiwan and Saudi Arabia and with continued disruption to Middle East flows.
Higher shipments to the US further reduced supplies available to buyers in markets like China and India.
Key Highlights
· Four-week domestic exports fell to less than 110,000 tonnes, the lowest since mid-July.
· The additional flows to the US accounted for most of the past week’s exports, following a surge the previous week to a six-year high.
· Four-week exports to India fell below 10,000 tonnes for the first time since November 2023.
· Four-week exports to China held below 7,000 tonnes for a second week, the lowest level in more than four years.
· Imports rebounded in the latest week, boosted by a cargo from the Netherlands, the first large shipment from Europe in about a month.
Market Repercussions
The slowdown in shipments came ahead of the seasonal pick-up in demand across Asia during the final weeks of the third quarter, leaving regional buyers facing tighter availability just as requirements typically increase.
China’s higher base oils output could help offset the drop in flows from Singapore. India could use new production capacity to cover more of its requirements. Its tighter supply balance still left it more exposed, especially after the recent drop in flows from other major sources including Saudi Arabia.
The larger shipments to the US suggested that the cargoes included grades for which availability was tighter in the Americas, such as brightstock or brightstock-equivalent products.
The steep premium of US brightstock prices over Asia cargo prices added to the incentive to move more heavy-grade volumes to that market.
Singapore’s lower exports left South Korea under greater pressure to sustain elevated output and exports in the face of more volatile flows from other producers in and supplying the Asia-Pacific market.