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Singapore's base oils exports fell to a six-year low in May, making it the only major Asian market where shipments remained under pressure during the disruption period
Imports remained near eight-month highs despite the loss of Middle East Group III supply, pointing to continued availability from alternative suppliers
The divergence pointed to buyers sourcing more volumes directly from producers in South Korea, Taiwan and Saudi Arabia rather than through Singapore
Singapore's base oils exports fell to a six-year low in May, making the island-state the only major Asian market to record a sustained decline in shipments during the disruption period.
Exports fell to less than 120,000 tonnes in May from more than 190,000 tonnes in April, Enterprise Singapore data showed.
The volume was the lowest since May 2020 and well below average monthly shipments of close to 180,000 tonnes during the year to April.
Singapore’s weaker exports pointed to feedstock supply disruptions that impacted domestic output.
The decline contrasted with most other major Asian markets, where exports either recovered or remained firm despite disruptions to Middle East supply and volatile feedstock markets.
Those steady exports, along with Singapore’s still-elevated imports, pointed to sufficient supply that buyers drew on to offset the drop in shipments from the city-state.
Key Highlights
· Exports to Southeast Asia fell to the lowest since April 2023, while shipments to India dropped to their lowest level since May 2023.
· Imports reached 70,600 tonnes, the second-highest monthly volume in eight months despite lower Group III inflows from the Middle East and Hong Kong.
· Higher imports from Europe, Taiwan, South Korea, Malaysia, Thailand and Saudi Arabia offset the decline in Middle East Group III supply.
Market Repercussions
Singapore’s exports fell during a period when regional buyers had been increasing purchases to cover against supply disruptions.
Still-elevated imports pointed to buyers’ ability to cover for shortfalls by sourcing cargoes directly from other markets such as South Korea, Taiwan, Thailand and Saudi Arabia.
The shipments pointed to sufficient volumes in those other markets and the opportunity for those suppliers to expand market share in a region where structural supply outweighed demand.
The slump in Group III flows from the Middle East and increase in direct shipments from alternative premium-grade suppliers also highlighted growing competition for those volumes across Asia, Europe and the Americas.
That competition is likely to keep premium-grade supply tighter than other base oils grades, even as availability of Group II remains relatively comfortable and even with any resumption of normal flows through the Strait of Hormuz.
