Japan’s base oils supply recovered in September as domestic output rebounded to a five-month high.
Base oils output rose to 166,000 kilolitres (147,000 tonnes) in September, government data showed.
The volume recovered from less than 133,000 kilolitres the previous month to the highest since April.
Higher output coincided with weak domestic demand and still-low exports, pointing to a build-up of Group I supplies in Japan.
Any such stock-build coincided with a pick-up in Asia’s Group I base oils supply from other sources in the region and from more distant markets from the end of the third quarter of the year.
A build-up of surplus volumes in Japan raised the prospect of adding to that supply during the fourth quarter of the year.
Asia’s Group I base oils cargo prices already fell sharply relative to gasoil prices in recent weeks in response to the rise in surplus supply.
