South Korea’s base oils exports to the US fell to a four-month low in May, raising the prospect of keeping a squeeze on surplus availability of Group III supplies in the North American country.The drop in shipments coincided with the start of maintenance work on a key Group III base oils unit in South Korea in May.It also coincided with signs of a slowdown in shipments to the US from the Middle East, where two Group III units underwent maintenance work during the second quarter of the year.South Korea and the Middle East are the key sources for most of the US’ Group III base oils supplies.South Korea’s base oils exports of 37,700 tonnes to the US in May fell from almost 49,000 tonnes the previous month to the lowest since January, government data showed..Shipments fell in January at a time of year when US demand faced a seasonal slowdown during the winter months.The drop in shipments in May was at a time of year when demand was seasonally firmer.South Korea’s lower shipments in May also likely included a cargo of Group II base oils, cutting further the total volume of Group III supplies bound for the US.Higher US Group III base oils prices in recent weeks reflected the market's firmer supply-demand fundamentals.Group III 4cSt base oils outright prices rose in June to a nine-month high. Prices climbed relative to US Group II light-grade prices to the highest in a year.South Korea’s base oils exports to Latin America also stayed low in May.Total shipments to the region held at less than 2,000 tonnes for a second month and came to less than 14,000 tonnes in the first five months of the year.The volume was down from 29,000 tonnes during the same five-month period last year.The lower volume reflected the tighter surplus supply in Asia so far this year, curbing the need or availability to line up arbitrage shipments to outlets like Latin America.The discount of Asia’s Group II light-grade cargo prices to US export prices widened gradually so far in the second quarter of the year, making the arbitrage more feasible.The arbitrage remained shut for heavy grades..S Korea’s May base oils exports stay low.Global base oils arb outlook: Week of 16 June.US’ April base oils imports hold firm
