S Korea’s Jan base oils exports rise

South Korea’s base oils exports rose to a four-month high in January, adding to a pick-up in supplies from other regional producers like Taiwan.

The rise in shipments followed an unusual fall in base oils exports from Asia-Pacific refiners in the fourth quarter of last year. The drop in supplies curbed the opportunity for blenders to replenish stocks.

Regional base oils demand typically starts to revive in the first few months of the year ahead of a seasonal pick-up in lube consumption in southeast and northeast Asia.

An expected revival in Chinese demand would add to the pick-up in requirements.

Signs of steadier base oils prices added to blenders’ willingness to replenish stocks.

The prospect of tighter supply because of scheduled plant maintenance work in the coming months also increased buyers' incentive to lock in requirements.

South Korea’s base oils exports of 360,740t in January rose from a 31-month low of less than 300,200t the previous month, government data showed.

The volume rose sharply from average shipments of around 322,000 t/month in the fourth quarter of last year.

The rise in exports followed an increase in South Korea’s base oils production in December to a seven-month high.

The rise in production coincided with an improvement in regional base oils prices relative to crude and diesel.

Taiwan’s base oils exports also rebounded in January. But most of its shipments moved to markets like southeast Asia rather than to China.

The flows suggested that Chinese demand had remained relatively weak in the month of January.