Singapore Base Oils Exports Rise in Month to 14 Jan on China Surge

Singapore’s base oils exports rose sharply in the four weeks to 14 January, as shipments to China surged to their highest level in months.

Total exports of close to 170,000 tonnes rose from less than 155,000 tonnes last week, reaching the highest level in almost a month amid a rebound in shipments since the start of the year, Enterprise Singapore data showed.

Exports to China rose even more sharply, climbing to the highest since end-October and the second-highest level since May.

The rise in shipments added to a surge in China’s domestic base oils output in December, as well as unusually high South Korean base oils exports to the country last month.

Key Highlights

·         The surge in supplies in or moving to China points to a round of stock-replenishment ahead of the Lunar New Year holiday in second-half February.

·         The timing of the Lunar New Year leaves limited time after the festival for buyers to replenish stocks before a seasonal pick-up in activity after winter.

·         Singapore’s base oils exports to southeast Asia matched the highest level since early-October, adding to signs of stock-replenishment in the region.

·         Singapore’s four-week export volume exceeded the average of 161,000 tonnes in the three months to mid-January, which were themselves higher than the 152,000-tonne volumes during the previous three months to mid-October.

·         Even so, the increase in exports lagged the scale of the recent expansion in Singapore’s production capacity following the start-up of a large Group II unit in September.

·         Singapore’s base oils imports held close to a multi-year low in the four weeks to mid-January, reinforcing signs that higher domestic output displaced overseas supplies.

·         Even so, the size of the fall in imports suggests that any rise in output remains smaller than the increase in production capacity.