Europe’s Group III base oils supply rose to a four-month high in January as a rise in imports from the Mideast Gulf countered a drop in supplies from Asia-Pacific.The rise in supplies followed a prolonged drop in availability during the final quarter of last year. Supply showed signs of tightening again in February, before improving in March.Balanced-to-tight supply-demand fundamentals early this year contrasted with plentiful availability of Group I and Group II base oils in the region.European Group III base oils prices firmed relative to Group I and Group II prices early this year, reflecting the product’s tighter supply fundamentals.A pick-up in supplies in March would be timely.Europe’s firm Group III base oils prices relative to crude and relative to other base oils grades boosted refiners’ profit margins.They also provided a strong incentivize for blenders to consider switching to alternative products like Group II base oils or polyalphaolefins.Europe’s Group III supply of more than 150,000t in January rose from close to 130,000t the previous month, government and port data showed..The volume was the highest since last September. Supply fell markedly since then because of a combination of plant maintenance work in Europe and Mideast Gulf and a drop in shipments from Asia-Pacific. Supply from the Mideast Gulf and Asia-Pacific showed signs of slowing in February before recovering strongly in March.A rise in supply from those two regions in March would help to cover for an expected seasonal pick-up in demand and plant maintenance work in the region during the second quarter of the year.Supply from Spain rose in January and February from the fourth quarter of last year. Its March volumes showed signs of holding at firm levels.The country’s surge in supplies in 2022 helped to partially counter a slowdown in shipments to Europe from the Mideast Gulf and Asia-Pacific markets..Spain’s Feb Cartagena exports hold firm
