Spain’s Dec Cartagena exports rise

Exports of premium-grade base oils from the Spanish port of Cartagena recovered in December from a nine-month low the previous month.

The pick-up in shipments coincided with a rise in supplies from sources like Bahrain.

The improvement in availability raised the prospect of easing the recent upward price pressure on premium-grade base oils.

Tight supply fundamentals had supported a rise in Europe’s Group III base oils prices relative to Group I and Group II base oils during the fourth quarter of the year.

A simultaneous slowdown in shipments to Europe from markets like the Mideast Gulf and Asia-Pacific had cut supply of premium-grade base oils at the start of the fourth quarter.

A slowdown in shipments from Spain compounded the drop in supplies.

The slowdown from Spain also highlighted the growing importance of the supplies from the Mediterranean country for the European market.

Its rising supplies last year added to the incentive for base oils producers in other regions to redirect more shipments to other markets.

Exports of more than 42,000t from Cartagena in December recovered from less than 36,000t the previous month, according to Port Authority of Cartagena (PAC) data.

Exports rose mostly because of a pick-up in shipments from mid-December. The flow of shipments had been unusually low during the previous four weeks.

The slowdown in premium-grade shipments to Europe late last year coincided with a fall in the region’s lube consumption.

The slowdown mostly reflected falling consumption of industrial oils, while engine oil demand was firmer.

Firm engine oils consumption in turn supported steady demand for Group III base oils, even as supply tightened.

Premium-grade base oils exports of more than 535,000t from Cartagena in 2022 rose by 17pc from less than 460,000t the previous year to a record high.

Base oils shipments rose after an expansion of plant production capacity in Spain the previous year.

The lack of any plant maintenance in 2022 also contrasted with a heavy round of maintenance work in 2021.

The lack of any plant shutdown last year raised the prospect of a pick-up in maintenance work this year.