Taiwan’s Nov base oils exports rise

Taiwan’s base oils exports rose in November to their second-highest level in more than three years amid firmer margins and improving Chinese demand.

Larger export volumes in September had added to downward pressure on regional base oils prices and margins during the third quarter of the year.

Regional prices faced less pressure and rose strongly relative to crude and diesel in recent weeks even with a similarly large volume of exports from Taiwan in November.

The different price response partly reflected more balanced supply in the Asia-Pacific market in the fourth quarter of the year.

Firmer Chinese demand and prices provided additional support.

The end of China’s zero-Covid policy since early this month raised the prospect of a more sustained rise in demand over the coming months.

Taiwan’s base oils exports of 60,840t in November rose from 44,720t the previous month, government data showed.

The volume was only slightly less than the September export volume of 61,130t.

The September volume had been the largest since April 2019. The November volume was the second largest since then.

The large September volume had included less than 10,000t of shipments bound for China, or around 15pc of the total volume.

The share was down from more typical levels of close to 60pc of Taiwan’s total exports in 2021.

The share of Taiwan’s November shipments to China was also lower than in 2021.

But exports of more than 28,500t to China almost doubled from the previous month to the highest since February.

Their 47pc share of Taiwan’s total exports was the highest since April.

Base oils exports to China rose despite the ongoing and strict enforcement of the country’s zero-Covid policy that month.

But tighter domestic base oils supplies and rising domestic prices made shipments from Taiwan increasingly competitive.

Domestic prices in China fell back in December as supply improved.

But demand also faces the prospect of reviving following the relaxation of Covid-19 restrictions in the country.