Japan’s May base oil exports rise

Japan’s base oil exports rose in May to a 14-month high, extending a sustained rise in shipments and adding to the Asia-Pacific region’s healthy supply fundamentals.

Base oil exports of 107,610 kilolitres (95,320t) in May rose from 97,460kl the previous month and by 57pc from year-earlier levels to the highest since March 2021, government data showed.

Exports of 455,630kl in the first five months of the year were up 2pc from an already high 448,310kl during the same period last year.

The volume was the highest for that five-month period since 2018.

Japan’s base oil exports have remained high amid an unusually light round of plant maintenance work so far this year. The country’s base oils production has also rebounded since March.

The high volumes also reflected Japan’s waning consumption of Group I base oils as lubricant blenders use more premium-grade supplies instead to meet stricter specification requirements.

The rise in shipments has added to a well-supplied Asia-Pacific market. Unexpectedly weak Chinese demand so far this year has also left more supplies available for other markets such as southeast Asia.

Japan’s base oil exports to that region rose in May to their highest in more than a decade, mostly on the back of a surge in shipments to Singapore.

The rise in shipments boosted exports to the city-state to some 152,360kl in the first five months of the year.

The volume was up 32pc from 115,320kl during the same period last year and helped to supplement Singapore’s still lower-than-usual base oil exports.

Japan’s exports have stayed high even with regional base oil prices struggling to keep pace with strong crude and diesel prices and at a steep discount to prices in other regions.