The delivery of premium-grade base oils from the Middle East to key global outlets climbed to a thirteen-month high in June, at a time when Group III base oils margins were already under sustained pressure.The key outlets of US, Europe and Asia took delivery of more than 320,000 tonnes of premium-grade base oils in June from Qatar, UAE and Bahrain combined, government and customs data showed.The volume surged from 230,000 tonnes the previous month.Total imports from Qatar rose to a twenty-one-month high of more-than 245,000 tonnes, from around 155,000 tonnes the previous month.Imports of more than 45,000 tonnes from the UAE in June were the highest in five months.The rise in supplies pointed to steady or rising premium-grade base oils output even in the face of increasingly squeezed Group III margins in key global markets.The trend suggested that margins remained high enough or that producers were prioritizing market share over price at a time when refiners in US and China have boosted domestic Group III production.The surge in supplies from the Middle East in June mostly reflected a jump in shipments to those two markets.US imports of more than 130,000 tonnes from the Middle East in June were close to the highest in twenty-one months and extended to a third month a wave of higher-than-usual shipments from the region.Shipments rose even as fundamentals stayed weak, with US Group III prices extending their slide in the third quarter of the year.Asia’s imports from the Middle East climbed to a six-month high of close to 150,000 tonnes in June.Imports rose even amid muted demand in China and a pick-up in the country’s Group III production to a multi-year high in July.But the rising output had little direct impact on the rest of the region.China’s base oils exports remained low and mostly consisted of other base oils grades.The dynamic left the rest of Asia an attractive market for Group III refiners both in the region and in the Middle East.Europe was the outlier. Its premium-grade imports from the Middle East fell to a four-month low in June.The focus on the US and Asia rather than Europe could reflect those other markets’ additional outlets such as Mexico and South America, as well as rising lube demand in the Asia-Pacific region.A side-effect was to leave Europe’s Group III supply relatively steady in June.Its Group III base oils prices also outperformed US and Asia Group III base oils prices so far during the third quarter of the year..Europe June Grp III supply holds steady.US’ June base oils imports rise.China’s July base oils imports fall.Singapore’s July base oils exports rise
