S Korea's Dec base oils exports rise

South Korea’s base oils exports rose in December as shipments to China rebounded.

The rise in total exports curbed the size of any build-up of surplus supplies in South Korea at the end of last year.

The rise in exports to China added to the country’s supply amid a steady rise in its domestic base oils output.

China’s rising supply coincided with firm domestic base oils prices relative to competing fuel prices and relative to prices in the Asia-Pacific market, ICIS data showed.

The firm prices even with a rise in supplies pointed to a pick-up in China’s domestic demand.

South Korea’s total base oils exports of 381,000t in December rose from close to 311,000t the previous month and by 27pc from year-earlier levels.

Total exports of 4.19mn t in 2023 fell from year-earlier levels of 4.22mn t to the lowest since 2015.

Base oils exports fell because of plant-maintenance work and refinery run-cuts.

The sustained fall in exports in 2022 and 2023 pointed to more prolonged run-cuts in a market that faced growing structural oversupply and a sharp slowdown in demand from China.

Base oils exports to China improved from the end of the third quarter and rose in December to a ten-month high of 82,800t.

Any extension of the pick-up in shipments to China would tighten availability of South Korea’s supplies for other regions.

The trend could in turn incentivize South Korea’s refiners to raise run-rates, leaving supply more readily available.