The UK’s base oils supply fell in September to the lowest in more than three years amid lower output and sliding imports in the face of waning domestic demand.The lower demand added to a regionwide slowdown in base oils and lube consumption in Europe as economic growth turned to contraction.A growing number of refiners in Europe cut base oils output in response to the fall in demand and pressure on regional base oils prices.The UK’s base oils imports of 22,600t in September fell from more than 35,000t the previous month to the lowest since January 2021, government data showed..Imports in September fell from year-earlier levels for the first time in nine months.A sharp rise in imports in the first eight months of the year had helped to cover for lower domestic base oils production and for rising demand for premium-grade base oils.The UK’s base oils production fell again in September to a six-month low.This time imports joined the slowdown amid a pause in shipments from South Korea and a drop in supplies from the Netherlands to a nine-month low.The drop in domestic production and imports cut the UK’s total base oils supply to around 34,000t. The volume fell from more than 60,000t in August to the lowest since 2018.Even at that lower level, supply was almost sufficient to cover domestic and overseas demand. The shortfall of less than 2,000t reflected the weakness of demand in the UK and in Europe.The shortfall curbed any supply build and raised the prospect of relatively balanced supplies during the final quarter of the year.Europe’s base oils prices weakened sharply versus crude and diesel during the fourth quarter of the year even as refiners’ lower output curbed the size of the supply surplus.The trend reflected growing caution among buyers heading into the final weeks of the year. Concern about a further slowdown in demand incentivized blenders to limit their stocks.The move left them exposed to the possibility of tighter-than-expected supply if demand exceeds expectations..UK’s September base oils output falls.Base Oil News stories and analysis also available on ICIS platform
