China’s June base oil imports stay low

China’s base oil imports edged up in June from a seven-month low in May, when lockdowns in the country slashed lube demand.

The June volume remained unusually low, even as lockdown restrictions were eased.

Base oil imports of 154,030t in June improved from 138,420t the previous month, government data showed. They were still the second lowest in eight months.

The sustained drop in shipments cut total imports to 1.11mn t in the first half of the year.

The volume was down 13pc from 1.28mn t during the same period a year earlier and the lowest for that period in more than five years.

The slowdown in imports gathered pace at a time of year when China’s base oils demand typically peaks during the second quarter of the year.

Imports of 446,530t during that period fell by 27pc from year-earlier levels.

The timing of the slowdown complicated production and sales plans for base oil producers in the Asia-Pacific region. The plans typically incorporate an expected seasonal rise in Chinese demand from March to June.

The producers instead had to redirect China-bound shipments to other markets instead.

The moves left more supplies to clear through the spot market and weighed on regional prices.

The 11pc rise in China’s base oil imports in June from May was small.

It contrasted with a sharper 38pc rebound in China’s car sales in June from the previous month as the relaxation of lockdowns and government stimulus measures triggered a pick-up in economic activity.

The muted rise in base oil shipments suggested that importers remained wary about building larger stocks.

Low domestic Chinese prices relative to regional prices and concern about further lockdowns added to a reluctance to import larger volumes.