South Korea’s base oils output edged lower in June as additional plant-maintenance work continued throughout most of the month.Lower output, combined with firmer domestic demand and a surge in exports, left the country’s base oils supply lagging demand by the largest amount in three months.The dynamic left refiners with tighter supplies heading into the third quarter of the year, when regional demand typically faces a seasonal slowdown.South Korea’s base oils output came to 2.47 million barrels (348,000 tonnes) in June, KPA data showed..The volume fell from 2.53 million barrels in May and for the ninth time in ten months from year-earlier levels.The sustained fall in output partly reflected a prolonged round of scheduled plant-maintenance work and unplanned production issues since the third quarter of last year.The same dynamic extended into June, with scheduled maintenance-work taking place on a key Group III base oils unit in the country.The 57,000-barrel drop in output in June from May was smaller than the 402,000-barrel fall in production in March from February, when a Group II base oils unit underwent maintenance work.The smaller fall in output in June pointed to less extensive maintenance work compared with the shutdown of the Group II unit in March and April.The timing of the Group III maintenance-work also suggested that the drop in output in June mostly impacted those premium-grade base oils supplies.The rebound in South Korea’s base oils exports in June and a pick-up in domestic demand by contrast likely had a larger impact on the country’s Group II base oils supplies.The firmer demand also far outpaced the country’s supply.The dynamic pointed to tighter Group II supplies at the start of the third quarter because of firmer domestic and overseas demand, and tighter Group III supplies because of the recent plant-maintenance work..S Korea’s June base oils exports rise.Asia’s May lube demand falls.Base Oil News stories and analyses also available on the ICIS platform
