Spain’s August Cartagena exports slip

Exports of premium-grade base oils from the Spanish port of Cartagena held firm in August even as shipment volumes fell from the previous month.

Exports of more than 36,000t in August dipped from a four-month high of more than 57,000t in July, according to Port Authority of Cartagena (PAC) data.

The shipments lifted total exports to more than 357,000t in the first eight months of the year. The volume was up almost 40pc from less than 260,000t during the same period last year.

The lower volume last year reflected the impact of plant maintenance work during first-half 2021. The maintenance work included expansion of production capacity of Spain’s Group III base oils plant.

Base oils exports began to rebound during the third quarter of last year. They have held at more elevated levels since then.

European Group III base oils prices surged to unusually steep premiums to crude oil and to Group I base oils last year even as supply improved during the second half of the year.

Prices have also risen this year. But they lagged the pace of the rise in Group I prices. The discount of Group I to Group III prices narrowed sharply in response.

The relative Group III price weakness coincided with a rise in exports from Spain this year. Shipments from Finland in the first half of the year were also higher than year-earlier levels.

But the flow of supplies from other key sources of premium-grade base oils such as the Mideast Gulf dipped in first-half 2022 and especially in the second quarter of the year.

The relative underperformance of Group III prices to Group I this year also likely reflects the greater volatility of Group I prices.

These prices slumped in second-half 2021, while Group III prices were steadier.

Group I prices rebounded sharply from that slump during the first five months of this year. Group III prices faced less upward pressure, after avoiding such a steep slump late last year.