Japan’s base oils output fell to a six-month low in February, further squeezing availability of Group I supplies in the domestic and regional markets.Tighter supply preceded a seasonal pick-up in Asia’s lube demand in the month of March.Increasingly tight supply-demand fundamentals in turn supported a sustained rise in Asia’s Group I heavy-grade prices relative to Singapore gasoil prices in the first quarter of the year.Tight fundamentals and firm prices incentivized regional blenders to adjust formulations to cut their requirements for Group I base oils.Increasingly high prices for Group II heavy neutrals, and the difficulty of lining up an alternative for Group I brightstock, complicated any such moves.Japan’s base oils output of 152,000 kilolitres (135,000 tonnes) in February fell from more than 165,000 kilolitres the previous month, government data showed..The February volume was the second-lowest since late-2021. The lowest since then was in August, when production slumped because of an unplanned plant shutdown.Japan’s base oils output is likely to stay at lower levels this year because of a heavy round of plant maintenance work.The country’s lower base oils production capacity is likely to curb its ability to cushion the impact of the maintenance work.The lower production capacity follows the closure of several base oils units in recent years.Japan’s base oils exports already fell sharply over the past two years following the closure of the base oils units.The lower production capacity and plant maintenance work are likely to extend that trend through this year.Exports of less than 6,000 kilolitres to southeast Asia in February were the lowest in three months but similar to levels of more than 7,000 kilolitres/month in 2024.That volume was down from typical levels of more than 23,000 kilolitres/month in 2023.Exports to southeast Asia showed signs of staying lower in March, amid an ongoing pause in Singapore’s imports from Japan..S Korea’s February base oils output falls .China’s February base oils output mixed.India’s February base oils output falls.Asia's January lube demand rises
