Asia's July exports to Americas rise

A larger-than-usual volume of extra base oil shipments moved from Asia-Pacific to the Americas market in July as sellers tapped the arbitrage to the US to clear surplus supplies.

Exports from South Korea to the Americas rose in July to a record high. Exports from Taiwan to the Americas rose to the highest in at least seven years. Exports from India to the Americas also surged.

The simultaneous rise in shipments from different markets to the Americas reflected plentiful surplus supply in Asia-Pacific because of weak Chinese demand, as well as high prices in the Americas region.

The Americas has absorbed with relative ease a pick-up in the flow of additional shipments from Asia-Pacific to the region in recent months.

The latest flow of shipments may take longer to digest in view of their unusually large size.

South Korea’s exports of 102,360t to the Americas in July was 33,940t above its average of 68,420 t/month to the region over the past year.

Taiwan’s exports of 6,890t to the Americas in July was the highest in more than seven years and compared with less than 2,500t to the region in all of 2020 and 2021.

India’s exports of 4,630t to the region in July were the second such spot shipments in four months and the highest in nine months.

The combined additional volume of 45,460t from the three sources to the Americas in July was up from less than 6,500t in June and the highest in more than a year.

The second-highest additional volume during that period was last October, when a wave of shipments moved from India to Brazil.

The larger-than-usual volume from Asia-Pacific could provide a welcome boost to supply in the Americas if the region suffers weather-related disruptions over the coming weeks.

The additional volumes could be harder to absorb if supply in the region remains steady over the coming weeks and crude prices hold close to the lower levels they have fallen to during the third quarter of the year.