South Korea’s base oils exports stayed lower than usual in May for the fifth time in six months even after the restart of a key Group II base oils unit the previous month.The low volumes likely reflected the impact of replenishment of depleted stocks following maintenance work on the Group II unit, as well as the start of maintenance work on a Group III unit in May.The low export volumes coincided with ongoing plant-maintenance work in other key markets like China and India in May, keeping Asia’s supply fundamentals relatively balanced.South Korea’s total base oils exports of 327,000 tonnes in May were up slightly from 324,000-325,000 tonnes during each of the previous two months, government data showed..The volume was up from less than 290,000 tonnes/month in December and January but down from typical levels of more than 365,000 tonnes/month in the first five months of 2024.The lower exports added to tight supply-demand fundamentals in Asia during the first few months of this year.The region’s Group II base oils prices reflected those tighter fundamentals.The price-premium of FOB Asia Group II heavy-grade base oils over Singapore gasoil extended its rise in April and May to the highest levels since late-2021.Asia’s Group II light-grade price discount to US export prices widened gradually so far during the second quarter of the year to levels that left marginal the feasibility of working the arbitrage to Latin America.The weakening price-differential contrasted with a sharp slump in the FOB Asia price-discount to US export prices in the second and third quarters of 2024.The more muted weakening-price trend pointed to more limited surplus volumes to clear from Asia so far this year.South Korea's tighter supplies also incentivized regional buyers to turn to other sources instead to cover their requirements.Its base oils exports of 66,100 tonnes to southeast Asia in May fell for the third time in four months from year-earlier levels to a five-month low.The slowdown contrasted with a pick-up in base oils shipments from Singapore to the region in May.The dynamic left exports from Singapore to southeast Asia outpacing supplies from South Korea to the region in May for the third time in four months.Singapore's base oils exports exceeded flows from South Korea to the region a total of four times in 2024..S Korea’s April base oils output rises.S Korea’s April base oil exports stay low.US’ April base oils imports hold firm.Base Oil News stories and analyses also available on the ICIS platform
