Thailand’s base oils supply rose in May on the back of a simultaneous pick-up in domestic production and imports.The steady rise in base oils imports this year helped to partially cushion the impact of lower Group I base oils output.An extension of that trend, even with base oils output staying lower, could free up more Group I supplies from domestic producers for the export market.Any such pick-up in Group I shipments for export would attract strong demand in the Asia-Pacific market, where surplus supply remained tight, especially for heavy grades.Thailand’s lower-than-usual Group I base oils output so far this year instead added to the regional tightness.Output improved to 53,700 kilolitres (48,000 tonnes) in May, up from 51,000 kilolitres the previous month, government data showed.The May output and average production volumes of less than 49,000 kilolitres/month in the first five months of the year remained well below levels of close to 56,500 kilolitres/month during the same period last year.Output stayed lower even with regional Group I base oils prices rising to a steep premium to gasoil prices in the first half of the year.Lower domestic output levels contrasted with a rise in Thailand’s base oils imports in May and in the first five months of this year.The rise in imports partially balanced out the drop in domestic output.The rise in imports could also have been a factor that deterred a rise in domestic output amid stronger demand for premium-grade base oils as the country adopts increasingly stringent fuel standards.Thailand’s rising demand for higher-quality base oils in turn boosted its importance as a key outlet for shipments from premium-grade producers in the region, especially Singapore and South Korea.The higher imports and domestic output lifted Thailand’s base oils supply to more than 82,000 kilolitres in May.The volume was up from around 77,200 kilolitres in April and around 77,600 kilolitres/month in the first five months of 2023..Japan’s May base oils supply lags demand.S Korea’s May base oils output recovers
