Japan’s January base oils/lube output stays low

Japan’s base oils and lube output edged up in January, even as the country’s refinery run-rates held at firmer levels.

Base oils and lube output edged up to 163,010 kilolitres (144,400t) in January, government data showed. The volume rose from 162,540kl in December to the highest in six months.

But output has remained much lower than usual since the second half of last year. Production had averaged more than 178,000 kl/month in the first seven months of last year. Regional supply was unusually tight during that time.

The lower-than-usual output levels since then coincided with easing supply-tightness and more muted domestic and overseas demand. Regional Group I base oil prices fell sharply in second-half 2021 in response to the weaker fundamentals.

But lower base oils output has contrasted with firmer refinery run-rates in Japan since the third quarter of last year.