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Spain's Group III shipments stayed elevated in May for a fourth month, with all volumes staying within or near Europe
Delayed maintenance at Spain's plant risks overlapping with planned outages at other units, threatening a simultaneous supply reduction in an already disrupted market
Indonesia's Group III exports showed signs of slowing after April's 15-month high, with only one cargo heading to Europe in second-half June
Spain's Group III base oils exports held at elevated levels for a fourth straight month in May, helping support European supply ahead of a heavier period of maintenance work and tighter availability from the Middle East.
Total shipments from Spain held at close to 40,000 tonnes in May for a second month, port data showed. Volumes held close to or above that level for a fourth straight month, rebounding from a dip during the four months to January.
Spain's elevated exports helped boost European inventories ahead of a period when Group III availability could tighten further.
Maintenance work previously expected during the second quarter was delayed at several facilities in Europe and Asia.
The postponements reduced immediate supply losses but raised the prospect of multiple plants undertaking maintenance around the same time during the summer.
Key Highlights
· Shipments staying within or near Europe rose close to the highest levels in more than two years, with a pause in flows to India for the first time in three months.
· Indonesia's Group III exports showed signs of slowing in May after surging to a 15-month high in April.
· One cargo was set to reach Europe in second-half June, with no further shipments so far after that.
Market Repercussions
Seasonally weaker demand should help offset part of the impact of scheduled maintenance work during the summer months.
Overlapping maintenance would also limit the market's ability to offset supply losses from individual plants.
The market was already operating with reduced flexibility following the loss of Middle East Group III supply. The tighter capacity increased the importance of flows from remaining suppliers such as Spain, Finland, Indonesia and Malaysia.
It also increased the impact of any change in output or shipments from those remaining suppliers.
Overlapping summer maintenance increased the risk of a sharper reduction in Group III availability during the coming months.
