S Korea’s Nov base oils exports to Americas rise

South Korea’s base oils exports to the Americas market rose in November to their third-highest level in the past three years.

The highest and second-highest levels during that time had both been during the second half of this year.

Supplies rose to tap strong demand and high prices for Group III base oils in the US as well as an open arbitrage to move shipments to Latin America.

The flow of shipments to the US showed signs of holding firm in December, even if at lower levels than the previous month.

Total shipments of 86,060t to the Americas in November rose from less than 43,000t the previous month, government data showed.

The volume was higher than typical shipments of less than 70,000 t/month in the year to October.

Exports to the region stayed high at a time of year when US demand typically faces a seasonal slowdown.

They stayed high even as South Korea’s total base oils exports remained much lower than usual in November.

The dynamic pointed to lower run rates for Group II base oils and still-firm output of Group III base oils.

It also highlighted the Americas' still-firm demand and high prices relative to other markets.

The firm shipments left the Americas region the largest outlet for supplies from South Korea. A larger share of its shipments typically move to northeast Asia and southeast Asia.

Firm demand in the Americas enabled South Korea’s producers to partially counter the impact of weaker demand in Asia-Pacific in the fourth quarter of the year.

Any recovery in demand in China over the coming months would curb producers’ need and ability to tap more distant markets like the Americas.

Any such move would likely force buyers in those regions to seek supplies from other sources instead.

The November shipments to Latin America included more than 3,000t to Brazil and an even larger volume to Ecuador.

The ongoing flow of shipments to the region was likely to continue to curb buyers’ requirements for supplies from the US.