Taiwan’s June base oil exports slump

Taiwan’s base oil exports slid in June to a nine-month low amid a slump in shipments to China.

Base oil exports of 23,100t in June fell from 40,240t the previous month, government data showed.

The volume was the lowest since last September, when Taiwan’s sole base oil plant was offline for maintenance work.

The volume was also lower than in April. Exports dipped to less than 28,000t that month, when some unscheduled plant maintenance work took place.

No plant maintenance had been scheduled for June. Even so, the size of the dip in shipments that month suggested that base oil run-rates may have been cut.

Such a move would have mirrored a similar trend in Japan. Base oils production levels in the country fell in May at the same time as diesel output rose.

Unusually high regional diesel prices relative to crude and unusually weak base oil prices relative diesel have incentivized Asia-Pacific refiners to implement such moves.

Weak Chinese demand added to the incentive to cut base oils production.

Taiwan’s base oil exports of 2,870t to China in June fell from an already-low 10,200t the previous month to the lowest since last September.

Exports to China had averaged more than 20,000 t/month in 2021.

Exports to China dipped in June even as the country relaxed strict lockdown measures that had been in place in key commercial centres like Shanghai.