Taiwan's July exports to Americas rise

Taiwan’s base oils exports to the Americas surged in July, taking advantage of an open arbitrage for trans-Pacific shipments.

Base oils exports of 6,890t to the Americas in July rose from 2,020t the previous month to the highest in at least seven years, government data showed.

Exports to the Americas rose even as Taiwan’s total base oils exports fell in July to a 10-month low of little more than 21,000t.

The diverging trends reflected unusually weak Chinese demand and an unusually large gap between Asia-Pacific and US base oils prices.

China is typically the largest market for base oils from Taiwan.

The sustained slowdown in Chinese demand and the closed arbitrage to China instead prompted moves to redirect shipments to other markets such as India and the US.

The shipment to the US in July was the fourth this year. Before 2022, there had been just two cargoes from Taiwan to the US during the previous six years.

The trans-Pacific July shipments from Taiwan also included a cargo to Brazil. There had previously been no such cargo shipments to that market in the past seven years.

Buyers in Latin America have shown sustained interest in shipments from Asia-Pacific this year in view of their competitive prices compared with supplies from the US.

The combined volume to the US and Brazil in July was larger than Taiwan’s base oils exports of around 5,000t to China that month. It was also larger than Taiwan’s base oils exports to southeast Asia and India.

Taiwan’s base oils exports of more than 14,000t to the Americas in the first seven months of the year was also larger than its total shipments to the region in the previous seven years combined.