Europe’s Group III base oils supply rose in July to the highest level this year as a recovery in shipments from Spain and Asia countered a slowdown in supplies from the Middle East.The region’s Group III base oils supply came to around 145,000 tonnes in July, government and shipping data showed..The volume rose from around 135,000 tonnes the previous month, when a rise in shipments from the Middle East partially cushioned the impact of a sharp dip in supplies from Spain and Asia.Those dynamics then reversed in July, when imports from the Middle East fell to the second-lowest level this year..The more volatile flows from the Middle East coincided with a heavy round of plant-maintenance work in the region during the second quarter of the year.Supply in the Middle East remained tighter at the start of the third quarter amid a gradual recovery in production and stocks following completion of the maintenance work.The dynamic highlighted the extended impact of plant-maintenance work in the base oils market.The lack of tools to cover exposure to price-volatility complicated and deterred stock-building ahead of such maintenance work.The pick-up in Europe’s Group III supplies in July showed signs of extending into August amid still-high volumes from Asia and Spain.Supply then showed signs of dipping in September as a slowdown in shipments from Asia added to a drop in supplies from the Middle East.The prospect of tighter supply in Europe in September coincided a seasonal revival in regional demand after the summer holidays.Tighter fundamentals supported firmer prices.Europe’s Group III base oils prices rose relative to other grades and relative to prices in other regions in recent weeks, pointing to such a dynamic.Supply in October is then likely to get a boost from a pick-up in shipments from the Middle East.The lack of any scheduled maintenance work at plants in Asia or Europe raised the prospect of steady flows from those regions too..US’ July base oils imports slip.Europe June Group III supply holds firm
