South Korea’s April base oil exports fall

South Korea’s base oil exports fell in April to an eight-month low, extending a period of lower-than-usual shipments from the key Northeast Asian supplier.

Base oil exports of 344,880t in April fell by 9pc from 379,560t the previous month, government data showed. Exports also fell by 19pc from year-earlier levels and for a third straight month.

The drop in shipments cut total exports to 1.44mn t in the first four months of the year. The volume was down 8pc from 1.56mn t during the same period last year.

The sustained slowdown in shipments has coincided with unusually weak base oil prices relative to crude and diesel. It has also coincided with tight availability of diesel supplies.

The trend has incentivized refiners to produce more of the motor fuel instead.

Exports faced additional pressure in the month of April because of plant maintenance work that was scheduled to start that month.

Refiners involved in maintenance work typically build stocks beforehand to be able to cover term commitments during the plant shutdown.

The drop in supplies has had little impact on regional base oil prices, which remain at steep discounts to prices in other regions.

By contrast, the higher export volumes this time last year coincided with unusually high base oil prices on an outright basis and relative to crude and diesel.