S Korea’s Nov base oils exports stay low

South Korea’s base oils exports stayed low in November for the third month in four, curbing any supply-build in the face of more muted demand in Asia.

The low exports pointed to refinery production holding at lower levels and raised the prospect of more balanced supply-demand fundamentals heading into the start of next year.

Regional demand typically sees a seasonal rise in the first quarter of the year. The period also often coincides with plant maintenance work in the region.

South Korea’s base oil exports of 338,920t in November rose from 329,000t the previous month, government data showed.

Exports fell for a sixth straight month from year-earlier levels, cutting total shipments to 3.92mn t in the first eleven months of the year.

The volume was down 10pc from 4.34mn t during the same period last year.

South Korea’s base oils exports surged to more than 410,000t in September as producers throughout Asia cleared a large overhang of surplus supplies.

That was the only month this year that exports exceeded the 400,000t level. They exceeded that level eight times last year.

Base oils exports held below the 340,000 t/month level three times in the last four months. They fell below that level just two times in all of 2021.

Refiners cut base oils production and exports this year mostly in response to weak Chinese demand that left the Asia-Pacific region with a persistent supply overhang.

Regional base oils prices fell to steep discounts to prices in other markets to open the arbitrage and clear the surplus supplies.

Prices faced less downward pressure in the fourth quarter of the year amid signs of more balanced supply even as demand stayed weak in China and showed signs of softening in southeast Asia.