S Korea Jan exports to India/SE Asia rise

South Korea’s base oils exports to India rose to an eleven-month high in January ahead of a seasonal rise in the country's lube demand in March.

Exports to southeast Asia also rebounded, giving blenders the opportunity to replenish inventories ahead of a seasonal rise in demand in the region.

The rise in shipments to both regions partly reflected the rebound in South Korea’s total base oils exports in January.

It also coincided with a sharp slowdown in base oils exports to China in January, following signs of a recovery in the country’s demand the previous month.

Expectations of a pick-up in Chinese demand provided an incentive for Asia-Pacific refiners to raise production and exports.

The more muted recovery in Chinese demand in January left producers targeting other markets with larger volumes.

The flow of shipments to China from markets like South Korea and Taiwan gathered pace in February as demand revived.

But demand in India and southeast Asia was likely to be more muted after blenders replenished stocks with the wave of January shipments.

South Korea’s base oils exports to India rose to more than 96,000t in January, government data showed. The volume rose from 56,600t the previous month to the highest since last February.  

South Korea’s exports to India had remained unusually low throughout most of the past year as low prices incentivized refiners to redirect supplies to other markets or back into their diesel pool.

The rise in shipments in January broke that trend and came ahead of a typical seasonal surge in lndia’s lube demand before the end of the financial year at end-March.

South Korea’s base oils exports to southeast Asia rose to a four-month high of more than 88,000t in January.

The increase mostly reflected a surge in shipments to Singapore as well as higher volumes to Vietnam and Philippines.

The rise in supplies replenished blenders’ stocks, leaving China the key determinant behind a further pick-up in demand over the coming months.