S Korea's February exports to India fall

South Korea’s base oils exports to India fell in February to the lowest in almost three years even as the country’s total exports surged.

The slump in shipments contrasted with a rebound in exports to markets like China, Mideast Gulf and Europe.

The rise in exports to other markets suggested that supply was sufficient even with a pick-up in demand from China.

The fall in exports to India instead pointed to moves by South Korean producers to target markets where demand and prices were higher than prices that buyers in India were targeting.

Buyers in India had been targeting unusually competitive prices for overseas supplies partly because of the persistent availability of base oils from domestic producers.

The prices for the base oils were at steep discounts to prices for imported shipments.

India's base oils demand also typically slows in the month of April following a surge in lubricants sales ahead of the end of the financial year at end-March.

The subsequent slump in South Korean shipments to India in February reflected producers' improved leverage to redirect supplies to other markets where demand was firmer.

The size of the fall in South Korea’s shipments to India could leave supply tighter than expected.

The slowdown coincided with plant maintenance work in India in February. It also mirrored a complete halt to base oil exports from Taiwan to India in February.

South Korea’s base oils exports of less 39,300t to India in February fell from more than 96,000t the previous month, government data showed.

The volume was the lowest since the second quarter of 2020, when lockdowns throughout Asia slashed market activity.

The fall in shipments to India contrasted with a surge in flows to the Mideast Gulf to more than 48,000t in February.

The record-high volume more than doubled from the previous month and from typical levels of less than 12,000 t/month.

It also exceeded the volume of South Korea's shipments to India for the first time ever.

The wave of exports added to a swathe of shipments bound for the Mideast Gulf from Europe during the first two months of the year.

The flows coincided with lower-than-usual availability of heavy-grade supplies from Iran.