Asia’s base oils supply rose to a five-month high in January as a pick-up in volumes from Taiwan and South Korea countered lower production in other markets like Japan.The rise in supply raised the prospect of adding to a build-up of surplus volumes from the end of last year.Regional base oils prices often face downward pressure relative to competing fuel prices at the start of the year, ICIS data showed.The trend coincides with a typical rise in surplus volumes during that period.The market curbed that pressure this year as a sustained rise in the region’s lube demand absorbed more of the supplies, leaving fundamentals more balanced.Signs of lower supply in February raised the prospect of continuing to limit the availability of surplus volumes through most of the first quarter of the year.Asia’s base oils output of around 920,000t in January rose from close to 870,000t the previous month, government and industry data showed.Output held below 900,000 t/month throughout the fourth quarter of last year mostly because of the shutdown of Taiwan’s Group II unit for maintenance work.The unit resumed operations in December before an unscheduled shutdown in late January.Stronger lube demand in Asia in January almost fully matched the rise in base oils production.The surplus of supply over demand held steady in response at less than 140,000t. It last exceeded the 140,000t level last August.The volume contrasted with a surplus of more than 200,000t in December 2022 and in January 2023.Asia’s base oils price premium to regional gasoil prices fell more steeply in early 2023 than early this year, reflecting the larger surplus at that time.Including China, Asia’s base oils output of around 1.39mn t in January rose from close to 1.32mn t during each of the previous two months.The volume was the second-highest in almost two years.Steady regional prices suggested China’s demand was sufficient to absorb the rise in its supplies..Asia’s January lube demand rises.Asia’s January base oils exports rise
Asia’s base oils supply rose to a five-month high in January as a pick-up in volumes from Taiwan and South Korea countered lower production in other markets like Japan.The rise in supply raised the prospect of adding to a build-up of surplus volumes from the end of last year.Regional base oils prices often face downward pressure relative to competing fuel prices at the start of the year, ICIS data showed.The trend coincides with a typical rise in surplus volumes during that period.The market curbed that pressure this year as a sustained rise in the region’s lube demand absorbed more of the supplies, leaving fundamentals more balanced.Signs of lower supply in February raised the prospect of continuing to limit the availability of surplus volumes through most of the first quarter of the year.Asia’s base oils output of around 920,000t in January rose from close to 870,000t the previous month, government and industry data showed.Output held below 900,000 t/month throughout the fourth quarter of last year mostly because of the shutdown of Taiwan’s Group II unit for maintenance work.The unit resumed operations in December before an unscheduled shutdown in late January.Stronger lube demand in Asia in January almost fully matched the rise in base oils production.The surplus of supply over demand held steady in response at less than 140,000t. It last exceeded the 140,000t level last August.The volume contrasted with a surplus of more than 200,000t in December 2022 and in January 2023.Asia’s base oils price premium to regional gasoil prices fell more steeply in early 2023 than early this year, reflecting the larger surplus at that time.Including China, Asia’s base oils output of around 1.39mn t in January rose from close to 1.32mn t during each of the previous two months.The volume was the second-highest in almost two years.Steady regional prices suggested China’s demand was sufficient to absorb the rise in its supplies..Asia’s January lube demand rises.Asia’s January base oils exports rise