Japan’s August base oils exports fall

Japan’s base oils exports fell to a seven-month low in August a month ahead of the planned closure of one of the country’s base oils plants.

Base oils exports of 79,800 kilolitres (69,890t) in August fell from more than 90,000kl in each of the previous four months to the lowest since January, government data showed.

The volume was down 5pc from year-earlier levels.

Exports had surged throughout most of this year, lifting total shipments to 717,580kl in the first eight months of the year. The volume was up 2pc from 706,290kl during the same period last year.

The year-on-year rise in exports slowed from a 4pc increase in the first half of the year as the surge in shipments ebbed during the third quarter.

The slowdown coincided with a sharp fall in regional base oils prices amid weaker demand as well as some plant maintenance work in Japan.

The availability of surplus volumes for export is likely to shrink further over the coming months following the planned closure of a 225,000 t/yr Group I plant at Negishi by the end of the third quarter.

Scheduled plant maintenance work during the fourth quarter of the year is likely to cut supply further.

This year’s rise in base oils shipments from Japan added to a regional surplus that kept pressure on Asia-Pacific base oils prices.

A likely slowdown in exports over the coming months would cut that surplus. It would also impact key trade flows to markets like Singapore and prompt buyers to adjust accordingly.

Japan’s base oils exports to Singapore rose by almost 20pc in the first eight months of this year to their highest in six years.

The shipments helped to balance out a slump in Singapore’s base oils imports from Europe this year.

Japan’s base oils exports to Thailand rose by close to 30pc in the first eight months of the year to the highest in more than a decade.

The rise in supplies coincided with and softened the impact of a drop in the country’s domestic base oils output this year.