China’s August base oils exports surge

China’s base oils exports surged in August to the highest in more than five years, highlighting the weakness of domestic demand and adding to surplus volumes in the Asia-Pacific market.

Exports of 38,450t in August rose from less than 3,500t the previous month to the highest since at least 2017, government data showed.

The volume was higher than total annual exports in 2018, 2019 and 2020.

The volume was lower than the total export volume in 2017, but only just. Annual exports reached 43,200t in 2017.

The rise in shipments lifted China’s total base oils exports to 94,820t in the first eight months of the year.

The volume was almost double the already-high exports of 48,150t during the same period last year. It was up from less than 15,000t during the same period in 2020.

The August volume was only slightly lower than Taiwan’s total base oils exports of just over 44,000t that month. It was higher than Indonesia’s export volume for August.

Taiwan and Indonesia are key base oils exporters in the Asia-Pacific region. China is typically a key base oils importer, with only negligible export volumes.

Regular exporters in Asia-Pacific had already faced a persistent challenge of clearing surplus supplies from the region, mostly because of the slump in demand from China.

The additional and rising supplies from China added to that challenge.

A large portion of the supplies moved to Singapore. A large portion then moved on from there to India. The supplies that moved to India consisted of Group I and Group II light-grade base oils.

More than 1,500t of base oils also moved to Russia in August. The volume was the highest in more than five years and only the second such shipment during that time. The first had been in July.