China’s June base oil exports surge

China’s base oil exports surged in June to a nine-month high, adding to surplus availability in the Asia-Pacific region.

Exports of 17,460t in June rose from 9,770t the previous month to the highest since last September, government data showed.

The rise in shipments pushed total exports up to 53,060t in the first half of the year. The volume was up 65pc from an already high 32,070t during the same period last year.

Exports had never exceeded 15,000t in the first half of the year during the previous three years before 2021.

China’s base oil exports rose in response to weak domestic demand and high overseas prices.

China’s base oils demand was lower than expected as lockdowns throughout the country slashed economic and industrial activity.

Regional base oils prices were low relative to prices in the Americas and Europe. But they were at a steep premium to domestic prices in China.

The rise in China’s base oils exports compounded the pressure on the Asia-Pacific market.

The sustained slump in China’s base oils imports had left refiners in the region with more surplus supply that they had to redirect to other markets.

China’s base oil exports added to that supply.

More than 16,000t of the June supplies moved to Singapore. A large portion of the volume was likely re-exported from the island-state to other markets like India.