South Korea’s base oils output rose in April following the restart of a key Group II base oils unit after scheduled maintenance work.Output was still the second-lowest in a year, reflecting the restart of the unit late in the month of April.The low production volume, combined with a large drawdown of inventories during the plant maintenance work, curbed the speed of a recovery in base oils exports.Such a pick-up in exports is more likely over the coming weeks.South Korea’s base oils output of 2.29 million barrels (323,000 tonnes) in April rose from 1.97 million barrels the previous month, according to the Korea Petroleum Association..The March volume was the lowest in twenty-one months and reflected the impact of the shutdown of the Group II base oils unit from end-February to late-April.South Korea’s base oils output was already lower than usual from the end of last year because of various production issues.The lower output complicated moves to build stocks ahead of the plant shutdown and magnified the subsequent drawdown of inventories during the shutdown.The lower stocks, combined with the muted rise in output in April, slowed further the pace of a recovery in base oils shipments to overseas markets at the start of the second quarter.Asia’s firm Group II heavy-grade prices during that period reflected the still-tight supply fundamentals.Asia’s Group II heavy-grade price rose relative to gasoil prices in April to the highest since late-2021.The heavy-grade price premium to gasoil then held close to but failed to exceed that level over the following weeks.The steadier price differential coincided with a gradual drop in outright prices at the same time as base oils availability in South Korea continued to recover. An extension of that recovery into June and subsequent rise in supplies for export would coincide with a seasonal slowdown in demand throughout the region in the coming weeks..S Korea’s April base oil exports stay low.S Korea’s March base oils output falls
