Asia-Pac Feb base oils supply steady

Asia-Pacific base oils supply held relatively steady at firm levels in February, contrasting with signs of lower output in other regions.

Total supply came to around 863,000t in February, down 2pc from 882,000t the previous month. The volume is derived from seven key suppliers in the Asia-Pacific region, excluding China and Indonesia.

The supply accounted for 75pc of those countries’ production capacity, down from 77pc the previous month.

The firm supply levels come at a time when availability of base oils in other regions is tightening.

The steady volumes in Asia-Pacific raise the prospect of attracting more interest from those other regions in moving arbitrage shipments to those markets.

The tighter availability in those other markets also increase the importance of supply in Asia-Pacific staying at those higher levels.

Supply has remained relatively firm even as crude and diesel prices trended higher throughout second-half 2021 and as base oil prices fell during that period. But the price-drop was from unusually high levels.

The squeeze on base oil margins rose more sharply since February after crude and diesel extended their rise. The trend boosted the incentive for refiners to produce more diesel instead.

Several base oil plants in Asia-Pacific were also set to undergo maintenance work in March and April.