China’s base oils imports were rangebound in the first two months of the year even as domestic production rose, lifting the country’s supply to the highest in almost two years.The rise in supply preceded an expected seasonal pickup in demand and a round of plant maintenance work in China from the end of the first quarter of the year.Weaker domestic Group II base oils prices relative to diesel and to regional prices in recent weeks suggested that supply was more than sufficient to meet the demand.China’s imports of 305,900t in the first two months of the year rose by less than 1pc from year-earlier levels, government data showed.The volume from the two months combined balanced out the distorting effects of China’s lunar new year holidays, which fell in February this year and in January last year.Average imports of close to 153,000 t/month in the first two months of the year were up slightly from typical levels of 146,000 t/month in 2023.China’s base oils exports were also relatively steady, with average volumes of 12,500 t/month in the first two months of the year.The steady volumes lifted China’s total supply, or paraffinic base oils output and net imports combined, to close to 1.20mn t in the first two months of the year.The volume rose by more than 30pc from around 903,000t during the same period last year.The rise in supply mostly reflected the rebound in China’s base oils output since the fourth quarter of last year.The steady import volumes so far this year suggested that China’s blenders still had requirements for certain types of base oils from overseas markets even with the rise in domestic output.But China’s weaker base oils prices suggested that demand had yet to recover to levels that could fully absorb the rise in supply.The higher supply also remained well below volumes of around 1.32mn t in the first two months of 2022.The higher volumes in 2022, and signs of more-than-sufficient supply at current levels, highlighted the ongoing weakness of current demand compared with two years ago..China’s February base oils output falls.S Korea’s February base oils exports fall.Taiwan’s Feb base oils exports fall.Base Oil News stories and analysis also available on ICIS platform
