Italy’s April base oils output stays low

Italy’s base oils production stayed unusually low in April for a sixth month, reflecting the prolonged shutdown of a key base oils plant in the country since late last year.

Output of 41,320t in April edged down from 42,160t the previous month to the second-lowest level in three years. The lowest level during that time had been in February.

Output had averaged close to 85,000 t/month in 2021.

The sustained drop in production slashed total output to 168,310t in the first four months of the year. The volume was down by more than half from 418,520t during the same period last year.

Output slumped because of the shutdown of a key Group I base oil plant in the country since last November.

The shutdown had been scheduled to last about a month. It was extended at least to the middle of this year to repair damage caused by a fire during the original shutdown.

The last time that Italy’s base oils production fell to such low levels was in first-half 2019, when extended plant maintenance work was also taking place.

At that time, output held below the 45,000 t/month level for three months.

This time, output has so far remained below that level for five months.

The fall in output from one of Europe’s key producers of Group I base oils coincided with a drop in base oil supplies of Russian origin in recent months. Most of those supplies were also Group I base oils.

The drop in base oils supplies from Italy complicated buyers’ ability to seek alternative base oils in place of the Russian shipments.

The unexpectedly tight supply triggered a surge in European Group I base oil prices in recent months. The prices have risen faster than Group II and Group III base oil prices.