South Korea’s base oils shipments to Europe slumped in January to their lowest in more than a decade even as the country’s total exports rose.The pause in shipments to northwest Europe followed a similar halt in premium-grade base oils exports from Indonesia to the region in December.A pick-up in shipments from Spain and from Mideast Gulf to Europe since late last year helped to counter the drop in supplies from Asia-Pacific..Spain's Jan Cartagena exports rise.Even so, the pause in shipments was likely to keep European supply relatively tight and counter the impact of weak lube demand in the region during the winter months.South Korea’s base oils exports to Europe came to less than 600t in January. The volume was down from more than 23,000t in each of the previous two months and from typical levels of around 20,000 t/month..Exports slumped because of a pause in shipments to Belgium and the Netherlands. The two countries are the key distribution points for Group III supplies from South Korea.The last time there were no exports to either of those outlets was in May 2020, when Europe-wide lockdowns slashed lubricants consumption.The more limited availability of Group III supplies in Europe contrasted with the more plentiful availability of Group I and Group II supplies in recent months.Europe’s Group III base oils prices reflected the tighter supply fundamentals.Prices fell less sharply than Group I and Group II prices in recent months. Their premium to Group I and Group II prices and to diesel rose in response.Demand fundamentals are now likely to improve over the coming months on the back a seasonal rise in lube consumption.Demand is also growing for premium-grade supplies to meet increasingly stringent engine oil specifications.South Korea’s flow of arbitrage shipments to Europe also fell sharply in January.A fall in Europe’s Group II base oils prices in the fourth quarter of last year and early this year raised the risk and cut the attraction of arbitrage shipments to the region..US’ Dec base oils exports to Europe fall
