Taiwan Oct base oil exports to India rise

Taiwan’s base oils exports to India rose in October to a more-than-three-year high even as Chinese demand revived.

The ongoing flow of arbitrage cargoes suggested the strength of the pick-up in Chinese demand was insufficient to absorb enough of Taiwan’s shipments.

The surge in shipments to India in October coincided with a slump in Taiwan’s base oils exports to southeast Asia.

That region had absorbed a large and growing share of Taiwan’s base oils shipments this year.

The trend reflected the region’s sustained rise in demand to support strong economic growth.

The rise in shipments helped to balance out the sharp slowdown in Chinese demand.

Any slowdown in demand in southeast Asia, without a significant recovery in Chinese demand, would force Taiwan to look further afield for outlets for its supplies.

Taiwan’s base oils exports of 19,020t to India in October rose from an already-high 15,560t the previous month, government data showed.

Shipments of 50,320t to India in the three months to October already exceeded Taiwan’s exports of 48,500t to the country in all of 2021.

The rise in shipments coincided with a fall in exports to southeast Asia to less than 2,400t in October.

The volume was the lowest since September 2021, when Taiwan’s Group II refinery was offline for maintenance work.

Taiwan’s exports to southeast Asia had averaged close to 10,000 t/month in the first nine months of the year.

Economic growth in southeast Asia is forecast to remain stronger than other regions over the coming months.

The pace of the growth is expected to slow compared with the first three quarters of the year in the face of rising interest rates and weakening overseas demand.

Any such slowdown would be more manageable if a revival in Chinese demand strengthens.

A strong rise in domestic Chinese base oils prices in recent weeks, and signs of tight supply in that market, has made more attractive the arbitrage to move more supplies to China.