China’s Aug base oils imports stay low

China’s base oils imports stayed unusually low in August, reflecting the sustained fall in the country’s lube demand.

Base oils imports of 92,960t in August edged up from 88,250t the previous month, government data showed.

The volume was the second lowest in more than five years. The lowest had been in July.

Typical import volumes in 2021 had been around 175,000 t/month.

The sharp slowdown in shipments cut China’s total imports to 1.29mn t in the first eight months of the year.

The volume was down 16pc from 1.53mn t during the same period last year and the lowest in more than five years.

This year's sustained slump in China’s base oils imports left a persistent supply-overhang in the Asia-Pacific market.

The surplus volumes kept pressure on base oils prices, which remained at a steep discount to prices in Europe and the Americas.

Regional refiners have had to clear those surplus supplies with increasingly regular shipments to markets like India, Mideast Gulf and Latin America.

Any uptick in Chinese demand would help to curb such requirements.

Firmer domestic base oils prices in China relative to regional prices in recent weeks had raised expectations of a pick-up in demand for overseas supplies.

The higher prices already reopened the arbitrage to import some products like Group I bright stock.

China’s unusually low import volumes in August instead highlighted the ongoing slowdown in domestic lube demand in the face of slowing economic growth.

Any support from a typical seasonal rise in lube consumption at the end of the third quarter has remained limited so far.