Singapore’s Base Oils Exports Slip In Month To 20 May

• Singapore’s base oils exports fell in the four weeks to 20 May, with domestic-origin shipments falling to the lowest since mid-April

• Shipments to China, India and Southeast Asia declined simultaneously for the first time since early April

• The slowdown added to pressure on regional supply after South Korea and Taiwan exports already slumped to 19-month lows in April

Singapore's base oils exports slipped in the four weeks to 20 May, adding to signs that Asia’s remaining supply cushion was beginning to narrow as regional availability tightened.

Total exports fell to less than 160,000 tonnes in the four weeks to 20 May, down from close to 190,000 tonnes during each of the previous two weeks and in April, Enterprise Singapore data showed.

Singapore’s exports had held firm through April and early May despite the same feedstock pressures and refinery economics that constrained output across other Asian supply hubs.

The latest decline raised the prospect of all three of the region’s principal suppliers — Singapore, South Korea and Taiwan — seeing export volumes weaken simultaneously.

Key Highlights

·         Domestic-origin exports fell below 130,000 tonnes for the first time since mid-April, down from typical monthly levels of more than 146,000 tonnes over the past year.

·         Exports to China, India and Southeast Asia weakened simultaneously for the first time since early April.

·         A sustained slowdown would increase pressure on Southeast Asian markets that already faced a slump in shipments from South Korea in April to a 16-month low.

Market Repercussions

Singapore's April export resilience had provided a partial buffer for falling availability from South Korea and Taiwan, where shipments dropped to 19-month lows.

The May slowdown reduced that buffer, particularly as Taiwanese export flows showed limited signs of recovery.

Regional buyers’ front-loaded buying in March limited the impact of falling flows in April.

Any renewed round of restocking across Asia would instead compound the impact of a slowdown in shipments extending into May.