Base oils supply in the Asia-Pacific region rose to an eight-month high in December even as exports extended their steep fall.Base oils exports fell amid muted regional demand at end-2022 and early this year..Asia's December base oils exports fall.The rise in supplies followed a seasonal pick-up in Chinese demand in October and November and the scrapping of its zero-Covid policy in early December.Regional base oils prices rose relative to crude and diesel from early November in response to firmer supply-demand fundamentals.The rise in base oils supply in December raised the prospect of reversing those firmer fundamentals and putting pressure on prices.The pick-up in volumes also highlighted the difficulty of maintaining lower output in a market where base oils production capacity exceeds demand.Base oils supply of more than 955,750t in December rose from less than 885,000t the previous month, government and industry data showed. The volume was the highest since April 2022..The volume was derived from seven key suppliers in the Asia-Pacific region, excluding China and Indonesia.Total supply of 11.22mn t in Asia-Pacific in 2022 rose by 8pc from 10.41mn t the previous year.Supply of 2.68mn t in the fourth quarter fell from 2.82mn t during the previous three months to the lowest since first-half 2021.A sharp fall in base oils supply in October and November had followed a surge in exports in September. The shipments removed of a large overhang of surplus volumes from the Asia-Pacific region. The low output over the following months kept supply tighter.The tighter supply curbed the flow of arbitrage shipments to markets like the Americas and supported steadier regional prices.Supply had fallen partly because of plant maintenance work in Thailand in October and November. The country's output rebounded in December following the completion of the maintenance work.Lower output in South Korea in October and November had coincided with unusually weak base oil margins. A pick-up in output in December coincided with firmer margins. .S Korea's Dec base oils output rises.Output in India rose in December to its highest in more than a decade as lower-priced crude oil supplies from Russia incentivized domestic refiners to maximise run rates.Many of those factors extended into the beginning of this year.A pick-up in Chinese demand would help to absorb some of the supplies.But a revival in demand only began to materialize from early February after the lunar new year holidays.The subsequent overhang of surplus supplies triggered a surge in base oils exports from markets like South Korea and Taiwan in January.The Taiwan exports included supplies bound for the US..Taiwan Jan exports rise to India, SE Asia
Base oils supply in the Asia-Pacific region rose to an eight-month high in December even as exports extended their steep fall.Base oils exports fell amid muted regional demand at end-2022 and early this year..Asia's December base oils exports fall.The rise in supplies followed a seasonal pick-up in Chinese demand in October and November and the scrapping of its zero-Covid policy in early December.Regional base oils prices rose relative to crude and diesel from early November in response to firmer supply-demand fundamentals.The rise in base oils supply in December raised the prospect of reversing those firmer fundamentals and putting pressure on prices.The pick-up in volumes also highlighted the difficulty of maintaining lower output in a market where base oils production capacity exceeds demand.Base oils supply of more than 955,750t in December rose from less than 885,000t the previous month, government and industry data showed. The volume was the highest since April 2022..The volume was derived from seven key suppliers in the Asia-Pacific region, excluding China and Indonesia.Total supply of 11.22mn t in Asia-Pacific in 2022 rose by 8pc from 10.41mn t the previous year.Supply of 2.68mn t in the fourth quarter fell from 2.82mn t during the previous three months to the lowest since first-half 2021.A sharp fall in base oils supply in October and November had followed a surge in exports in September. The shipments removed of a large overhang of surplus volumes from the Asia-Pacific region. The low output over the following months kept supply tighter.The tighter supply curbed the flow of arbitrage shipments to markets like the Americas and supported steadier regional prices.Supply had fallen partly because of plant maintenance work in Thailand in October and November. The country's output rebounded in December following the completion of the maintenance work.Lower output in South Korea in October and November had coincided with unusually weak base oil margins. A pick-up in output in December coincided with firmer margins. .S Korea's Dec base oils output rises.Output in India rose in December to its highest in more than a decade as lower-priced crude oil supplies from Russia incentivized domestic refiners to maximise run rates.Many of those factors extended into the beginning of this year.A pick-up in Chinese demand would help to absorb some of the supplies.But a revival in demand only began to materialize from early February after the lunar new year holidays.The subsequent overhang of surplus supplies triggered a surge in base oils exports from markets like South Korea and Taiwan in January.The Taiwan exports included supplies bound for the US..Taiwan Jan exports rise to India, SE Asia
