Lower base oils output contrasts with firm domestic consumption
Dynamic keeps supply tight for other markets
Tighter supply coincides with firm Group II prices
The Netherlands’ base oils production fell in September, while domestic consumption remained unusually high, keeping supply tighter for other European and global markets.
Total output dropped to 89,000 tonnes in September, down from an eight-month high of 114,000 tonnes in August, CBS Statline data showed.
The Netherlands is home to Europe’s sole virgin Group II base oils unit.
August’s higher output was an anomaly. Production averaged less than 87,000 tonnes/month in the eight months to September, well below the 107,000 tonnes/month seen in the prior eight-month period.
Lower output contrasted with rising domestic demand, primarily for “transformation in oil products” rather than finished lubricants.
This kept net supply, or output less domestic demand, below 20,000 tonnes in September for the third time in four months.
The volume was down from typical levels of more than 40,000 tonnes/month in the first half of the year and more than 55,000 tonnes/month during the second half of last year.
The tighter supply coincided firm Europe Group II base oils prices versus Group I base oils and compared with Group II prices in other regions during the third quarter.
Elevated price-differentials for Group II heavy-grade base oils extended into the fourth quarter of the year.
