South Korea’s base oils output edged up in January even as the country’s exports extended their steep fall.The disconnect triggered a rise in net supply that facilitated stock-building ahead of the shutdown of a key Group II base oils plant from end-February for maintenance work.Base oils output of 2.61 million barrels (368,000 tonnes) in January rose from 2.56 million barrels the previous month, industry data showed. .Output remained down from more typical levels of closer to 2.70 million barrels during the months when production was unaffected by issues such as maintenance work, run-cuts or unexpected production issues.Some such production issues impacted output in December, while lower base oils margins triggered some run-cuts in January.Output is likely to stay lower than usual over the coming months because of the shutdown of the base oils plant for maintenance work.The firmer output in January contrasted with a dip in South Korea’s base oils exports for a second month.The pattern mirrored a similar trend in September, when a sharp fall in exports far outpaced the size of a drop in base oils output.South Korea’s net supply surged that month to a two-year high in response.Similar dynamics in January triggered an even sharper jump in the country’s net supply to the highest in more than three years.The rise in surplus supply facilitated moves to build stocks ahead of the plant maintenance work, and then to cover term requirements during the plant shutdown.South Korea’s base oils exports rebounded in October following their slump in September, even as output dipped because of a plant shutdown.A build-up of surplus supplies in January made more feasible the possibility of a similar scenario over the coming months..S Korea’s January base oils exports fall.S Korea’s Dec base oils output falls
