Thailand’s November Base Oils Output, Exports Hold Firm

Thailand’s Group I base oils output and exports held firm in November, boosting regional availability while also limiting a build-up of surplus volumes in the domestic market.

Total base oils output came to 56,500 kilolitres (50,000 tonnes) in November, holding in a narrow range for a fourth straight month, Ministry of Energy data showed.

Output held firm despite a seasonal slowdown in demand in Asia and the availability of additional surplus volumes from other regional refiners.

Asia’s Group I base oils prices maintained a higher-than-usual premium to gasoil prices during the fourth quarter even as surplus supply increased.

The sustained price-strength suggested that regional and overseas demand remained sufficient to absorb excess volumes.

Demand extended beyond Asia, with a cargo shipped from Thailand to the Middle East, where plant-maintenance work was taking place during the final weeks of the year.  

Key Highlights

·         IRPC’s base oils exports rose in November, climbing above typical levels during the first ten months of the year.

·         Thai Lube’s exports remained elevated for a third straight month, offsetting the impact of weaker domestic demand.

·         Thailand’s steady shipments lifted Group I exports from Asia’s main Group I suppliers to the second-highest level in seven months.

·         Thailand’s net Group I base oils supply, or output less domestic and overseas demand, edged lower in November, remaining well below levels in the fourth quarter of 2024.

Market Repercussions

Thailand’s lower Group I base oils supply balance in the fourth quarter curbed the urgency for refiners to make large price adjustments to clear surplus volumes.

Even so, refiners faced pressure to maintain steady export volumes to keep inventories at manageable levels.

Other markets in Asia, like Japan, faced a similar challenge.

The strategy remained more viable while Asia’s Group I base oils held relatively firm.

It could get more challenging if the region’s Group I margins come under increased downward pressure.