South Korea’s base oils exports extended their fall to a four-month low in January, curbing the availability of surplus supplies in Asia at a time of year when demand faced a seasonal slowdown.The smaller surplus complicated buyers’ opportunity to build stocks ahead of plant maintenance in South Korea later in the first quarter of the year.The smaller surplus also curbed the need for regional refiners to line up arbitrage shipments to more distant outlets, or to adjust prices to facilitate such shipments.South Korea’s total exports of 282,000 tonnes in January fell from an already-low 289,000 tonnes the previous month, government data showed.The January volume was the lowest since last September and down from typical levels of closer to 350,000 tonnes/month.The even steeper dip in exports in September coincided with the shutdown of a key Group II base oils unit in South Korea for plant maintenance work.The drop in exports in September facilitated refinery moves to build stocks and cover requirements during the shutdown.The lower export volumes in December and January could have reflected similar moves to build stocks and cover requirements during maintenance work on another Group II base oils unit in South Korea from end-February.The lower exports also coincided with unexpected refinery production issues in December, then refinery run-cuts in January.The subsequent impact on production during those two months likely complicated any moves to build stocks ahead of the plant maintenance work.A smaller stock-build raised the prospect of increasing the impact of the drop in base oils output during the plant shutdown over the coming weeks.Asia’s base oils prices reflected signs of the tighter-than-usual supply fundamentals at the start of the year.The arbitrage stayed shut to markets like the Americas and Europe and got harder to work to outlets like the Middle East.The premium of Asia Group II heavy-grade prices over Singapore gasoil also stayed unusually high at the start of the year and well above year-earlier levels..Taiwan’s January base oils exports fall.China’s Jan base oils output holds firm.S Korea December base oils exports fall.Base Oil News stories and analysis also available on ICIS platform
