South Korea’s base oils output fell to an 18-month low in October as weak margins incentivized refiners to produce more middle distillates instead.Output extended its slide to levels that were even lower than during scheduled plant maintenance work in the second quarter of the year.The slump in output cut South Korean producers’ base oils volumes available for export. These fell in October close to the lowest levels in more than two years.A surge in the country’s exports in September had cleared an overhang of surplus supplies.The drop in base oils output in October slowed any subsequent build-up in supplies. It also coincided with a drop in production in several other markets in Asia-Pacific in October.Regional base oils prices rebounded strongly relative to crude and diesel in November amid more balanced supply-demand fundamentals.South Korea’s base oils output of 2.58mn bl (363,940t) in October fell from 2.62mn bl the previous month to the lowest since May 2021, according to Korea Petroleum Association (KPA)..Base oils output fell from year-earlier levels for a fifth month even as total refined products output extended its rise for a thirteenth month.The contrasting trends reflected a sustained rebound in production of diesel and jet fuel during that period.Output of the middle distillates fuels accounted for more than 40pc of total production in October for the third time in four months. Before July, output had exceeded that level just once in the previous two years.Refiners focused on maximising middle distillates output in response to strong demand and firm prices relative to crude.The dynamic contrasted with relatively weak base oils demand, persistent surplus supply of the lubricant feedstock and low prices relative to crude and diesel.Base oils’ share of refined products output held relatively steady at low levels of around 2.55pc of the total in October. The share was down from more than 3pc of output during the second half of last year..Asia's October base oils exports fall
