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Singapore's base oils exports climbed to a two-month high in the month to July 22 after recovering from June's multi-year lows
Higher exports and sustained imports offered tentative signs of improving regional supply, although the recovery remained fragile
Regional disruptions and sporadic Middle East shipments reinforced the need for buyers to diversify supply sources
Singapore's base oils exports climbed to a two-month high in the month to July 22, offering tentative signs that supply was beginning to recover after May and June's sharp slowdown.
Four-week exports rose to more than 132,000 tonnes from 106,000 tonnes a week earlier, Enterprise Singapore data showed. The increase lifted shipments to their highest level since May, after exports bottomed out in the first half of June before stabilising.
The improvement followed the strongest weekly export performance since late April, with shipments rising across all regional markets. Exports to Southeast Asia and China moved closer to their longer-term averages, though India continued lagging typical levels.
The higher volumes pointed to easing production disruptions, although their sustainability was uncertain after several short-lived rebounds since early May.
Key Highlights
· Imports remained above 115,000 tonnes despite easing from last week's multi-year high, as arrivals from the US and Europe paused for the first time since late May.
· Imports from China stayed close to their highest level in more than nine years, reinforcing the country's growing role in covering more regional supply.
· Imports from Qatar totalled more than 17,500 tonnes over the past two weeks, an unusual development following months of disrupted Middle East shipments.
· Weekly exports exceeded 50,000 tonnes, the strongest performance since late April.
Market Repercussions
Any sustained recovery in Singapore's exports would ease pressure across Asia just as buyers begin securing cargoes for delivery later in the third quarter.
But repeated disruptions from Singapore, Taiwan and the Middle East over recent months increased the importance of security of supply and the need for diversified procurement.
The sporadic return of Qatari cargoes was welcome but also highlighted the market's exposure to disruption to supplies originating from a single source.
Diversifying supply is more complex, but recent disruptions showed that security of supply often outweighed the additional cost.
