UK’s June base oils output stays low

The UK’s base oils output stayed lower than usual in June, as imports surged to cover the country’s requirements.

Base oils output of 21,540t in June fell from 23,830t the previous month and by 16pc from year-earlier levels, government data showed.

The sustained slowdown cut total output to 126,480t in the first half of the year.

The volume was down 25pc from 168,390t during the same time a year earlier and the lowest for that period in seven years.

Base oils output fell even amid signs of steady domestic and overseas demand for the lubricant feedstock.

The slowdown also contrasted with strong refinery production that supported a more-than 30pc rise in middle distillates output during the first half of the year.

The strong diesel and jet fuel output levels extended into June.

The weak base oils output levels and strong middle distillates production mirrored a similar trend in other markets as unusually strong diesel prices incentivized refiners to maximise output of the fuel.

The slowdown in UK production could also reflect rising demand for premium-grade base oils. Most of the UK’s base oils output consists of Group I base oils.

The UK’s base oils imports from the Netherlands more than doubled in the first of 2022 to more than 43,000t. That country’s base oils production consists of Group II base oils.

Imports of more than 13,000t from the US in the first half of the year were up from little more than 2,000t during the same period last year.

The US is a key source of Group II base oils for the European market.

Rising imports of premium-grade base oils and dwindling demand for Group I supplies mirror a similar trend in a growing number of countries in Europe, Asia-Pacific, and the Americas.