Asia's October base oils exports fall

Base oils exports from Asia-Pacific slumped in October to the lowest in more than a year after refiners cleared a large surplus the previous month.

Signs of lower base oils production in several key markets in the region in October also slowed any subsequent rise in surplus volumes.

Base oils exports from several key producers showed signs of rising in November.

The region's base oils exports of less than 610,000t in October fell from more than 750,000t the previous month, government data showed.

The October volume was the lowest since August 2021. The September volume had been the highest since November 2021.  

The surge in exports in September had helped to clear a large overhang of surplus supplies in the Asia-Pacific region.

The shipments included a large volume of arbitrage cargoes. These reached destinations like Brazil, Argentina and North and South Africa during the fourth quarter of the year.

The wave of shipments curbed demand in those markets for supplies from more regular sources like US and Europe.

The more muted demand coincided with a rise in surplus supplies in US and Europe and added to downward price pressure.

The slowdown in exports from Asia-Pacific in October raised the prospect of buyers in those more distant markets reverting to supplies from more typical sources.

Base oils exports fell in October partly because refiners’ stocks were more balanced following their clear-out the previous month.

Steadier base oils prices and signs of improving demand in China also curbed regional producers’ concern about exposure to even lower prices.

Plant maintenance work in Thailand and signs of lower production in Singapore also curbed the volumes available for export.

Any pick-up in exports in November was likely to have a smaller impact on more distant markets than the September volumes.

A larger portion of shipments from Taiwan moved to China. Southeast Asia continued to absorb large volumes from Singapore.