S Korea’s July exports to India/Mideast Gulf stay lower

South Korea’s base oils exports to India stayed lower than usual in July for a second month, curbing the prospect of a significant supply-build in the country during the monsoon season.

Total exports of 71,300 tonnes to India in July rose from an eleven-month low of 59,500 tonnes the previous month, government data showed.

The volume was still down from average shipments of more than 92,000 tonnes/month to India in the first half of the year.

The lower exports coincided with a closed arbitrage from the US to India and signs of a slowdown in shipments from Singapore to the country in recent weeks.

The prospect of a synchronised slowdown in shipments to India from some of its key suppliers would coincide with a seasonal fall in lube consumption in the month of August as monsoon rains curb activity.

A simultaneous drop in demand and in shipments bound for India would curb the size of any build-up of surplus volumes.

Such a scenario would increase the volume of replenishment supplies required ahead of a seasonal pick-up in India’s base oils and lube consumption from the end of the third quarter.

South Korea’s base oils exports to the Middle East also stayed lower in July for a second month.

Shipments of 9,000 tonnes to the UAE in July rose from 4,600 tonnes in June.

They were still the second-lowest volume in seven months and down from average levels of more than 22,000 tonnes/month in the first five months of the year.

The extended slowdown in shipments coincided with a seasonal drop in consumption in the Middle East during the summer months.

The drop in shipments enabled buyers in the region to continue to work down the large stocks they had accumulated in the first five months of the year.