Europe’s Group II base oils supply fell to a twenty-one-month low in February because of regional plant maintenance work and a drop in imports from the US.Total supply of less than 90,000 tonnes in February fell from more than 120,000 tonnes in January to the lowest since mid-2022, government data showed.Supply fell from average levels of more than 140,000 tonnes/month in 2023.The region’s Group II supply likely continued to stay lower than usual in March as plant maintenance work in the Netherlands extended through the month.Europe’s Group II base oils prices continued to edge lower versus feedstock prices during the first quarter of the year and held steady relative to Group I prices.Prices stayed weak even with lower Group II base oils supply during the first quarter of the year.A seasonal slowdown in demand at the start of the year countered the impact of the drop in supply.The lower supply still curbed the volume of shipments to outlets outside Europe in February.It also left the regional market more balanced at the start of the second quarter of the year, when demand faced a seasonal pick-up.Firmer demand coincided with the closure of a Group I base oils unit in Europe and increasingly competitive Group II base oils prices versus Group I prices.Supply was set to recover in the second quarter of the year following the completion of the plant maintenance work.At the same time, a recovery in US Group II export prices since the end of the first quarter of the year eroded the attraction of moving more surplus volumes to Europe..Europe Feb Grp III base oil supply stays low.Netherlands’ Feb base oils output falls
