Taiwan’s July Base Oils Exports Stay Low For Second Month

Taiwan’s base oils exports stayed unusually low for a second month in July, adding to weak flows from Singapore and the Middle East and limiting Asia’s supply surplus.

Exports rose to 30,400 tonnes in July from 25,200 tonnes in June, Customs Administration data showed. June’s total was the lowest in 28 months, while July was the second-lowest in 22 months.

The slowdown followed refinery production issues and a subsequent slump in shipments during the first half of July. Exports would have been even weaker but for a rebound in the final week of the month, when more than half the month’s total was loaded.

The lower shipments coincided with a prolonged slowdown in Singapore’s exports, limiting alternative supply for buyers in Southeast Asia and India, and cutting the size of a regional surplus that typically builds at the start of the third quarter.

Key Highlights

·         Exports to Southeast Asia recovered to more than 15,500 tonnes, just above typical monthly levels over the past year.

·         Southeast Asia and India accounted for 75% of exports, up from 55% during the first seven months of the year.

·         Exports to China fell to 7,200 tonnes, the lowest since October 2024.

·         No cargoes moved to the Americas or Europe despite open arbitrage opportunities.

Market Repercussions

Taiwan’s exports are set to fall again when scheduled plant maintenance begins at the start of the fourth quarter.

That would remove a major supply source for Southeast Asia and India, increasing the importance of a sustained recovery in Singapore’s exports, which have remained unusually low since May.

Asia’s base oils supply has already fallen because of Middle East disruptions. Scheduled maintenance in Taiwan would put further pressure on regional availability.

That combination could leave even less surplus available for arbitrage shipments from Asia to more distant markets at a time when buyers there are already competing for tighter supply.