South Korea’s base oils output fell in September to a sixteen-month low, despite the lack of any scheduled plant maintenance work.The drop in output coincided with unusually weak regional base oils prices and a wave of surplus base oils supplies in the Asia-Pacific market.Low prices and plentiful supply incentivized South Korea’s refiners to pare back base oils production and to focus on other more profitable products like middle distillates.Base oils output of 2.62mn bl (369,000t) in September fell from 2.79mn bl the previous month and by 14pc from year-earlier levels, according to Korea Petroleum Association (KPA)..Output had already held at lower levels since June as persistent oversupply in Asia-Pacific kept downward pressure on prices.The surplus supply mostly reflected the impact of the prolonged and steep slowdown in Chinese demand for shipments from Asia-Pacific.A seasonal slowdown in base oils demand during the monsoon season in southeast Asia and India compounded the dip in consumption.Falling base oils prices also deterred buyers that were seeking supplies. They preferred to hold back until they were comfortable that prices had bottomed out.Unusually strong diesel demand and prices gave refiners in South Korea and other markets more options than usual in response to the weak fundamentals in the base oils market.South Korea’s diesel and jet-fuel output rose in September for a 12th straight month and accounted for close to 40pc of total refined products output.The share was up from little more than 37.5pc of the total in 2021 and around 38pc of the total in the first half of this year.South Korea’s lower base oils output coincided with the closure of a Group I plant in Japan at end-September and a seasonal improvement in Chinese demand in September and October..China's September base oils demand edges up.Signs of lower exports from Singapore in October, persistently low base oils production in China and scheduled plant maintenance work in Thailand cut supply further.Regional base oils prices were steadier in recent weeks amid more balanced supply-demand fundamentals. .S Korea Aug base oils output stays low
