Taiwan's Sep exports to India/UAE rise

Taiwan’s base oils exports to India and the UAE rose in September to the highest in more than seven years, adding to plentiful availability in those regions.

The surge in shipments highlighted the repercussions of the sustained slowdown in demand from China and the need to divert shipments to other markets instead.

Taiwan’s base oils exports to India and UAE combined rose to almost 34,000t in September, government data showed.

The volume was up from an already high 15,730t in August and the highest since at least 2015.

The rise in shipments to India was unusual. The surge in supplies to the UAE even more so.

Exports of more than 18,000t to the UAE in September exceeded total shipments of around 16,500t to the country in the 20 months to August.

The Mideast Gulf is home to a major Group II base oils unit in Saudi Arabia.

India is a major outlet for Group II supplies from the same base oils unit.

India’s imports from Taiwan averaged around 4,000 t/month in 2021. The flows rose to more than 11,000 t/month in the five months to September.

The rise in spot shipments from Taiwan to India and UAE and the competitive prices for the cargoes curbed buyers’ requirements for supplies from more regular sources in the Mideast Gulf and in northeast Asia.

It also dampened interest in arbitrage shipments from more distant markets like the US.

The trend faced the prospect of continuing so long as demand from China stays muted.

China is typically the largest outlet for Group II base oils shipments from Taiwan.

India and the UAE instead accounted for some 55pc of Taiwan’s total base oils shipments of more than 61,000t in September.

The large volume kept pressure on regional prices that struggled to maintain a premium to gasoil prices.

The large size of the volume suggested moves by Taiwan to cut high inventories.

With stocks at more manageable levels, the flow of shipments to markets like India and UAE could continue. But the volume was likely to be lower.