The UK’s base oils production edged down in May, adding to a slowdown in output in Spain and Italy that month.The UK’s base oils output of 28,100 tonnes in May fell from close to 29,000 tonnes the previous month, government data showed.Spain’s Group I base oils output fell in May to a thirty-month low of less than 21,500 tonnes. The slowdown followed unexpected production issues at a plant in late-April.Italy’s output continued to trend lower in May following the closure of one of its two virgin Group I base oils units earlier in the year.Output of around 107,000 tonnes of Group I base oils from the three countries in May duly fell from more than 118,000 tonnes in April and for the fifth time in a row from year-earlier levels.The drop in output from some of Europe’s key Group I base oils producers coincided with some scheduled plant maintenance work elsewhere in the region, adding to the supply squeeze.Supply tightened at the same time as a seasonal rise in regional demand.The drop in output and firmer demand supported higher regional Group I base oils prices during the second quarter of the year.Tighter fundamentals and firmer prices had repercussions beyond the region that are likely to continue at least over the coming months.Tight supply and firm prices cut the availability of Group I supplies for markets beyond Europe.They instead increased the attraction of moving more Group I shipments to Europe from markets like Saudi Arabia, Egypt and the US.They also boosted the incentive for markets like Turkey to boost their own Group I base oils output.The country’s base oils output of more than 14,000 tonnes in May was the highest in five months.The sustained pick-up in output enabled the country to cut its requirements for high-quality Group I base oils from Europe..Netherlands’ May base oils output rises.Europe’s May Group III base oils supply edges down.Base Oil News stories and analysis also available on ICIS platform
