Japan’s base oils surplus of supply over demand rose to an eleven-month high in November as exports slumped to the lowest in more than a decade.The drop in shipments to overseas markets compounded the Asia-Pacific region’s tighter supply of Group I base oils.Tighter Group I supply in turn boosted demand for Group II base oils, especially for heavy grades.Japan’s base oils and lube output of 172,140 kilolitres (153,000 tonnes) in November fell from more than 183,000 kilolitres the previous month, government data showed.Output was still up from less than 160,000 kilolitres in August and September, when a key base oils plant in the country was offline for unplanned maintenance work.Japan’s domestic base oils and lube demand of 143,160 kilolitres in November also fell from the previous month and for a fourth month from year-earlier levels.A slump in exports compounded the drop in total demand.Total base oils exports of less than 24,000 kilolitres in November fell from already-low levels of less than 40,000 kilolitres/month throughout most of the past year to the lowest since at least 2008.Exports averaged close to 50,000 kilolitres/month in 2023 and more than 66,000 kilolitres/month in 2022.The sustained fall in shipments reflected the impact of several base oils plant closures since late-2022.Southeast Asia continued to face the largest impact from the slump in shipments.Japan’s base oils exports of less than 1,500 kilolitres to the region in November were the lowest in more than a decade, with shipments to Singapore almost grinding to a halt.The drop in shipments forced buyers in the region to target supplies from other sources or to use more Group II base oils in their formulations instead.The sustained strength of Asia Group II heavy-grade base oils prices since early last year reflected the impact of such moves.The fall in Japan’s base oils shipments cut the country’s total demand, or domestic consumption and exports combined, to 167,100 kilolitres in November.The volume was down from more than 184,000 kilolitres the previous month and lagged total supply of 190,700 kilolitres by more than 23,500 kilolitres.The supply surplus was the largest since end-2023..Taiwan’s Nov base oils exports rise.S Korea Nov base oils exports hold firm.Japan’s October base oils output rises.Base Oil News stories and analysis also available on ICIS platform
