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Base oils exports fell to a 19-month low, pointing to tightening regional supply availability
Shipments to China fell to multi-month lows as higher regional prices weakened arbitrage economics, redirecting volumes to other outlets
Steady exports to India and a resumption of flows to Pakistan boosted shipments to markets reliant on imports for most of their supplies
Taiwan’s base oils exports fell to a nineteen-month low in April, reinforcing early signs that Asia’s supply cushion was tightening as feedstock disruptions and higher prices reshaped regional trade flows.
Total exports fell to 32,200 tonnes in April, down from more than 54,000 tonnes in March and the lowest since September 2024, Customs Administration data showed.
The decline contrasted with a period of consistently higher monthly shipments over the past year, when Taiwan provided crucial supplies for markets such as India and Pakistan, as well as occasional arbitrage cargoes to Europe.
The pullback pointed to a reconfiguration of trade flows as regional pricing, refinery operations and feedstock constraints began to weigh on export availability.
Key Highlights
· Exports to China fell to an eighteen-month low, with its share of total shipments dropping to 27% from 32% in the first quarter.
· Shipments to Southeast Asia fell to a five-month low, contrasting with steadier flows to India.
· April shipments included a cargo to Pakistan, extending the regular flow of supplies to a market reliant on imports for most of its supplies.
· Light-grade base oils exports fell to the lowest since end-2023, with their share of total shipments dipping to a six-month low.
Market Repercussions
Exports to China fell as a widening gap between regional and domestic base oils prices closed the arbitrage, incentivizing buyers to rely more on local supply.
The dynamic pointed to China’s increasing influence on regional trade flows as rising self-sufficiency freed up Group II supplies for alternative outlets.
The slowdown in flows to China coincided with a pause in exports to the Middle East for a third month, further cushioning the impact of the drop in Taiwan’s total shipments.
An extension of the same dynamic to other suppliers in Asia could help support steadier flows to import-reliant markets, partially offsetting any drop in total regional output.
