South Korea’s base oils output rose to a four-month high in May following the completion of maintenance-work on a key Group II unit in late-April.Base oils output still held below typical levels, with maintenance-work starting on a Group III unit from around mid-May.Output levels face the prospect of rising more strongly in July following the completion of that maintenance work in second-half June.Any such rise in output at the start of the third quarter of the year would coincide with a seasonal slowdown in demand in most major markets.South Korea’s base oils output came to 2.53 million barrels (356,500 tonnes) in May, Korea Petroleum Association data showed..The volume rose from less than 2.30 million barrels the previous month and from a twenty-one-month low of less than 2.0 million barrels in March.Consistently lower-than-usual output so far this year cut South Korea’s total production to 11.78 million barrels (1.66 million tonnes) in the first five months of the year.The volume was down 8% from 12.77 million barrels (1.80 million tonnes) during the same period last year and added to Asia’s tighter-than-usual supply-demand fundamentals so far this year.The tighter fundamentals supported unusually firm regional Group II base oils prices relative to gasoil and relative to other markets like the Americas.That tightness could now start to ease, especially for Group II supplies.South Korea’s higher output in May failed to support a reciprocal recovery in the country’s base oils exports.Lower-than-usual exports instead enabled refiners to replenish their inventories.South Korea’s base oils supply outpaced demand in May for the first time in four months, reflecting that dynamic.The higher stocks left the country’s refiners better positioned to support a pick-up in exports of Group II base oils and to cushion the impact of the Group III plant-maintenance in June.Some ongoing Group II production at lower levels could slow the pace of a rise in base oils output in July.Even so, a seasonal slowdown in demand could put pressure on an extension of those moves to other plants to limit any build-up of surplus supplies..S Korea’s May base oils exports stay low.S Korea’s April base oils output rises
