South Korea’s base oils exports held firm in July as shipments to Southeast Asia stayed unusually high for a second month
Higher flows to Singapore, Vietnam and Thailand pointed to South Korean refiners gaining share amid persistently-low exports from Singapore
Exports to China fell to a 22-month low as rising domestic Group III supply and lower prices versus other markets encouraged South Korean refiners to target other outlets
South Korea's base oils exports held firm in July, gaining ground in Southeast Asia as Singapore's supply stayed weak.
Exports rose to 369,300 tonnes in July, up 5% year on year, the third-highest total in nine months, and well above the roughly 350,000-tonne average of the past year, Korea Customs Service data showed.
Exports to Southeast Asia held at close to 92,000 tonnes, down from 108,000 tonnes in June but still the second-highest volume in two years.
The sustained strength contrasted with weaker exports from Singapore and Taiwan and the continued slump in Middle East shipments to Asia.
South Korean supplies helped fill part of the gap left by the drop in flows from those other markets, boosting market share and maximising the benefit of unusually high margins, especially for Group III base oils.
The country’s relative supply resilience is becoming a competitive advantage, allowing its refiners to capture business from suppliers facing greater disruption despite their own exposure to Middle East feedstock.
Key Highlights
· Shipments to Singapore were close to 36,000 tonnes, the second-highest in 46 months after June.
· Exports to Vietnam and Thailand rose to the highest levels in six months.
· Exports to China fell to 21,300 tonnes, the lowest since September 2024, pulling total Northeast Asia shipments to their lowest in 22 months.
Market Repercussions
The longer Singapore’s exports remain below normal, the more established South Korea’s position in Southeast Asia becomes.
Even when Singapore’s shipments recover, buyers are likely to retain a broader supplier base after securing alternative sources and as a hedge against disruptions impacting any one of those sources.
The shift in trade flows extended to Northeast Asia, where South Korean exports to China fell to a 22-month low amid a seasonal slowdown in demand, rising domestic Group III output and stronger Chinese exports.
China’s growing supply reduced its need for South Korean material, while competitive domestic prices gave Korean refiners more incentive to direct barrels toward higher-priced markets in the US and Europe.
South Korea faced the same Middle East-driven disruption as its rivals, but its refiners managed the supply constraints in a way that turned a shared problem into growing market share.