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Taiwan’s base oils exports to India slumped in December, highlighting the impact on trade flows of the pick-up in Chinese demand.
Taiwan’s base oils exports to India surged in 2022, especially from the second quarter of the year as shipments sought alternative outlets instead of China.
Besides India, a steady flow of arbitrage shipments from Taiwan moved to outlets like the Mideast Gulf and the Americas.
Those flows almost completely halted in December.
A recovery in Chinese demand from late last year instead triggered a rebound in shipments to China.
The move cut surplus supplies for other markets like India.
Taiwan’s base oils exports to India fell to 20t in December, government data showed.
The volume was down from more than 9,000t in November and from more than 15,000t in each of the three months to October.
Even with the pause in shipments in December, Taiwan’s base oils exports of 99,900t to India in 2022 more than doubled from less than 49,000t the previous year.
The regularity, size and competitive prices of the cargoes put pressure on other suppliers moving shipments to India.
The prospect of a drop in Taiwan base oils exports to India in 2023 would ease that pressure.
Chinese base oils demand is likely to extend its recovery in the coming months following the removal of most Covid-related restrictions in the country.
An expected economic recovery would coincide with a seasonal rise in lube demand during the spring oil-change season.
A rise in Taiwan shipments to China would cut availability of cargoes for other markets like India, repeating a pattern that began in December.
The impact is likely to extend beyond shipments to India.
There were no base oils exports from Taiwan to the Americas in December for a second month.
The pause in shipments followed an unusually regular flow of cargoes to the region in the second and third quarters of last year.
There were also no exports to the UAE in December, versus close to 30,000t of shipments during the previous five months.
