Japan’s base oils supply rose to a six-month high in March as domestic output improved and imports stayed unusually high.Base oils output of 180,750 kilolitres (160,000 tonnes) in March rose from 160,500 kilolitres the previous month, government data showed.The volume was the highest since December.Output still fell by 22% and for a twelfth month from year-earlier levels.The sustained fall in output reflected the structural drop in Japan’s base oils production capacity following the closure of several plants since second-half 2022.The rise in base oils production from February coincided with a pick-up in Japan’s total oil products output to a three-month high.Increasingly firm Group I base oils prices in Asia in the first quarter of the year boosted regional refiners’ incentive to increase base oils output.The firmer prices reflected the impact of supply that consistently lagged demand.Plant maintenance work in Thailand and China compounded the supply tightness.Japan’s base oils supply got a further boost from imports that stayed unusually high in March for a second month.Shipments of close to 23,000 kilolitres in March were almost the same as in February and the second-highest in seventeen months.Imports stayed high on the back of firm volumes from South Korea and Qatar.The two countries are key producers of premium-grade base oils.Japan’s total supply, or production and imports combined, duly rose in March to a six-month high of 203,570 kilolitres.Imports accounted for more than 10% of total supply for a second month, up from a 5% share in 2023.Imports’ rising share of total supply highlighted Japan’s growing requirements for premium-grade base oils and its reciprocal drop in demand for Group I supplies..Japan’s February base oils output falls.Asia’s February base oils supply falls
