China’s base oils output fell to a three-month in October as several plants underwent maintenance-work.Total paraffinic base oils output of 450,000 tonnes in October fell from more than 485,000 tonnes in each of the previous two months, OilChem China data showed..The output levels in August and September were the highest this year.Output in October reverted to more typical levels during the year to July.The drop in output coincided with firm domestic Group II base oils prices versus Shandong diesel prices and versus FOB Asia cargo prices in October..Base oils output could now recover in November following the expected completion of some of that maintenance work.A recovery in output would coincide with a seasonal slowdown in demand.Higher output and softer demand raised the prospect of an adjustment in those firm domestic price-differentials to reflect the weaker fundamentals.Steady-to-firm prices would instead point to firmer-than-expected demand and incentivize refiners to maintain higher output.China’s Group II base oils output of more than 360,000 tonnes in October already remained relatively high.The volume was down from more than 400,000 tonnes in August and September. But it was well above typical levels of less than 355,000 tonnes/month in the year to July.Firm Group II light-neutrals base oils prices incentivized refiners to maintain high output of the grade in October.Group II output could have got a further boost from increasingly weak domestic Group III base oils prices relative to Group II base oils.The premium of Group III prices over Group II base oils narrowed further in October to its lowest level in more than three years.China’s Group III base oils output duly fell in October from the previous month after rising steadily throughout the third quarter of the year..China’s Sept base oils demand rises
