South Korea’s base oils output rose to a two-year high in July at a time of year when regional demand faced a seasonal slowdown.Base oils output of 2.81 million barrels (395,000 tonnes) in July rose from 2.63 million barrels the previous month to the highest since May 2022, industry data showed.The 19% rise in production in July from year-earlier levels also outpaced the 6% rise in South Korea’s total refinery output and 4% rise in diesel production.South Korea's rising base oils output and a seasonal slowdown in regional demand raised the prospect of a build-up of surplus supplies.That scenario showed signs of materializing, with the country’s base oils exports staying lower than usual in July even with the rise in output.The same dynamic already played out the previous month, when output held firm and exports fell to an eleven-month low.Asia’s base oils prices held unusually firm in July and August relative to feedstock and competing fuel prices even with the rise in South Korea’s output and drop in exports.The weak supply-demand dynamics and firm regional prices pointed to other factors keeping fundamentals more balanced.Lower exports and rising output pointed either to a pick-up in domestic demand or to a round of stock-building.Any moves to build stocks could reflect the impact of weaker demand and put pressure on prices when the supplies were sold into the market.Moves to build stocks could also reflect preparations ahead of the planned shutdown of a major Group II base oils unit in South Korea starting in mid-September.The drop in South Korea’s base oils exports in July showed signs of reflecting more a drop in Group II shipments than of Group III supplies.Such a dynamic suggested that stock-building consisted more of Group II base oils.Any such stocks could then help to cushion the impact of the plant shutdown in September..S Korea July base oils exports stay lower.India’s July Group II imports stay lower.S Korea’s July exports to Americas rise
South Korea’s base oils output rose to a two-year high in July at a time of year when regional demand faced a seasonal slowdown.Base oils output of 2.81 million barrels (395,000 tonnes) in July rose from 2.63 million barrels the previous month to the highest since May 2022, industry data showed.The 19% rise in production in July from year-earlier levels also outpaced the 6% rise in South Korea’s total refinery output and 4% rise in diesel production.South Korea's rising base oils output and a seasonal slowdown in regional demand raised the prospect of a build-up of surplus supplies.That scenario showed signs of materializing, with the country’s base oils exports staying lower than usual in July even with the rise in output.The same dynamic already played out the previous month, when output held firm and exports fell to an eleven-month low.Asia’s base oils prices held unusually firm in July and August relative to feedstock and competing fuel prices even with the rise in South Korea’s output and drop in exports.The weak supply-demand dynamics and firm regional prices pointed to other factors keeping fundamentals more balanced.Lower exports and rising output pointed either to a pick-up in domestic demand or to a round of stock-building.Any moves to build stocks could reflect the impact of weaker demand and put pressure on prices when the supplies were sold into the market.Moves to build stocks could also reflect preparations ahead of the planned shutdown of a major Group II base oils unit in South Korea starting in mid-September.The drop in South Korea’s base oils exports in July showed signs of reflecting more a drop in Group II shipments than of Group III supplies.Such a dynamic suggested that stock-building consisted more of Group II base oils.Any such stocks could then help to cushion the impact of the plant shutdown in September..S Korea July base oils exports stay lower.India’s July Group II imports stay lower.S Korea’s July exports to Americas rise
