South Korea’s August base oils exports rose 9% from a year earlier, marking a third straight month of annual growth
Shipments to Southeast and Northeast Asia fell sharply, taking Asia’s share of exports to its lowest level in almost two years
The shift toward Europe and the Americas left Asia with less supply as seasonal demand begins to recover and fourth-quarter maintenance approaches
South Korea's base oils exports held firm for a third straight month in August, but flows to the rest of Asia fell as refiners sent more cargoes to higher-priced markets in Europe and the Americas.
South Korea's total base oils exports came to more than 361,000 tonnes in August, up 9% year on year and marking a third straight month of annual growth, Korea Customs Service data showed. The volume remained above the 351,000-tonne monthly average of the past year.
The firm total concealed a marked shift in destinations, with shipments to the rest of Asia falling to a 23-month low even as flows to Singapore remained elevated.
Base oils prices in China and India remained weak relative to Asia export prices, while Europe and the Americas carried unusually steep premiums, giving refiners more incentive to direct cargoes to those higher-priced markets.
The shift reduced supply in Asia during the seasonal slowdown, leaving a smaller surplus as demand approaches its seasonal recovery.
Key Highlights
· Exports to Southeast Asia fell to 77,000 tonnes, from 92,000 tonnes in July and more than 107,000 tonnes in June.
· Excluding Singapore, Southeast Asia shipments fell to 41,000 tonnes, the lowest in four months and well below the region's average of more than 54,000 tonnes over the past year.
· Shipments to Singapore held at close to 36,000 tonnes, the second-highest level in 47 months, as South Korea covered more of Singapore's own supply shortfall.
· Northeast Asia shipments fell below 47,000 tonnes for the first time since September 2024.
· Combined exports to Southeast and Northeast Asia fell 14% year on year to 123,400 tonnes, the lowest since September 2024.
· Asia accounted for 34% of South Korea’s total exports, the lowest share since August 2024.
Market Repercussions
The drop in South Korean shipments to Asia and shift toward Europe and the Americas added to a similar trend among other producers, including Taiwan, Singapore and India.
The price gap continued to encourage Asian refiners to send more cargoes to Europe and the Americas. Any such moves would further limit the volume of supply retained within the region.
Asia would then enter its seasonal pickup in demand at the end of the third quarter with less spare supply than usual, while buyers across the region have been running leaner stocks.
Stronger demand and tighter supply would coincide with scheduled plant maintenance in Taiwan and Saudi Arabia in the fourth quarter, while Singapore’s exports have yet to show a sustained recovery.
The combination left the region more reliant on South Korea sustaining its elevated output and exports to cover any pickup in demand.