China’s base oils output fell to a three-month low in May amid a heavy round of plant-maintenance work.The country’s domestic base oils prices weakened relative to diesel prices in May even with the drop in output.Lower output and softer margins suggested the impact of any supply-tightness caused by the maintenance work had already peaked.The focus was instead turning to the prospect of rising supply over the coming months following the completion of most of the maintenance work.China’s total paraffinic base oils output of more than 435,000 tonnes in May fell from at least 465,000 tonnes in March and in April, OilChem China data showed..Output fell because of a simultaneous dip in production of Group I, Group II and Group III base oils.Group I base oils output extended its fall in May to the lowest since late 2021.The low output reflected the impact of plant maintenance work combined with the drop in China’s Group I production capacity. The lower capacity limited refiners’ ability to cushion the impact of the maintenance work.China’s Group III base oils output extended its fall in May to the lowest in a year.The sharp drop in output in April and May partly reflected refiners’ moves to produce more Group II base oils instead of Group III.The change in production followed the slump in domestic Group III prices relative to Group II prices from late-February to early April to the lowest in more than three years.The Group III 4cSt price-premium to Group II N150 remained close to those low levels in early June even after edging up slightly.The switch from Group III production to Group II cushioned the size of the fall in Group II base oils output in May to a three-month low.China’s Group II N150 premium to diesel prices surged in March and April, before peaking at a seven-month high in early-May.The higher premium coincided with the shutdown of a key Group II base oils unit that began in March.A sharp fall in the Group II N150 premium to diesel through the rest of May and early June coincided with the completion of the maintenance work at end-May.The prospect of higher base oils output in June would in turn coincide with the start of a seasonal slowdown in demand during the summer months.The lower margins showed signs of reflecting that dynamic..China’s April base oil demand holds firm.China’s April base oils output holds firm