S Korea July base oils exports to US rise

South Korea’s base oils exports to the US surged in July to a record high, tapping that market’s strong demand and high prices.

Base oils exports of 101,600t to the US in July rose from 65,070t the previous month and by 67pc from year-earlier levels, government data showed.

Exports to the country have typically been around 62,000 t/month over the past year.

The rise in exports in July lifted total shipments to the US to a record-high 443,860t in the first seven months of the year. The volume rose by 27pc from year-earlier levels of 350,580t.

The rise in supplies partly reflected the US market’s growing demand and high prices for Group III base oils.

It also coincided with a recovery in South Korea’s base oils exports, combined with weaker-than-expected demand in Asia-Pacific for premium-grade base oils.

Exports rose in July to a seven-month high.

Regional consumption was weak mostly because of the protracted slowdown in demand from China.

Demand was also more muted in other regional markets like southeast Asia and India as buyers preferred to hold back in anticipation of lower prices.

The slower consumption left the Asia-Pacific market with growing surplus supplies and low prices relative to other regions like the Americas market.

The combination of surplus supplies and an open trans-Pacific arbitrage boosted the attraction of moving more supplies to the US.