China’s base oils demand rose in September from year-earlier levels, lifting consumption in the third quarter to the highest in four years for that three-month period.Demand rose against the backdrop of higher domestic supply and firm Group I and Group II base oils prices in September versus Shandong diesel prices and versus prices in other markets.The price-strength extended into the start of the fourth quarter of the year.The ongoing price-strength suggested that demand was sufficiently strong to absorb the rise in supply.China’s notional base oils demand, or output and net imports combined, came to 580,000 tonnes in September, government and industry data showed.The volume fell from more than 590,000 tonnes the previous month but was up 5% and for a third month from year-earlier levels.The sustained rise in consumption lifted total demand to 1.70 million tonnes in the third quarter of the year..The volume was the highest for that three-month period since 2021, before pandemic-related lockdowns slashed economic activity the following year.Firmer demand in recent months suggested that China's economic activity was sufficiently strong to absorb the higher volumes..China’s base oils imports accounted for little more than 20% of demand in September. The share held at a similar level throughout most of the past year.But shipments from overseas sources of Group I and Group III base oils accounted for a larger share of the country’s total imports in September compared with the previous month.The dynamic suggested that base oils supply from domestic refiners was covering more of the country’s requirements for Group II base oils.An extension of that trend, combined with the recent start-up of new Group II production capacity in southeast Asia, raised the prospect of more regional supplies targeting other markets instead of China..China’s Sept base oils output stays high.S Korea's Sept base oils exports rise.Taiwan Sept base oils exports stay high.Base Oil News stories and analysis also available on ICIS platform
