China’s base oils imports rose to a six-month high in December, adding to a pick-up in the country’s domestic base oils output.Imports still fell in December for the third time in four months from year-earlier levels, contrasting with a rise in domestic output.The dynamic highlighted China’s shrinking requirements for base oils imports as domestic production covered more of its requirements.China’s lower total supply in December from year-earlier levels also pointed to more muted and rangebound demand.Total base oils imports of 131,400 tonnes in December rose from close to 100,00 tonnes in each of the previous three months, government data showed.Imports rose from November mostly because of a pick-up in shipments from South Korea and Qatar. Both countries are key producers of Group III base oils.China’s total imports still fell by 14% from year-earlier levels, contrasting with a rise in the country’s base oils output that month.The diverging trends cut imports as a share of China’s base oils supply, or output and net imports combined, to 23% of total supply in December and to 22.7% in 2024.The share fell from 29% in 2023 and 30% in 2022.A less feasible arbitrage to move supplies from Asia to China reflected that dynamic.The premium of China’s domestic Group II N150 price over FOB Asia Group II cargo prices narrowed to an average of around $350/tonne in 2024, down from more than $390/tonne in 2023.China’s rising base oils output in recent years coincided with a steady increase in the country’s base oils exports, including in 2024. But the export volume was still relatively small.The net effect of China’s rising base oils output was still a rise in regional supply outside the country, with lower import requirements forcing overseas refiners to divert shipments to other markets instead..China’s December base oils output rises.S Korea December base oils exports fall.Global premium-grade imports from Middle East fall in Oct
