Taiwan’s base oils exports stayed unusually high in August for a second month amid a rebound in shipments to China and an ongoing wave of supplies to southeast Asia.Taiwan's base oils exports of 49,500 tonnes in August fell from 57,000 tonnes the previous month, government data showed.The July volume was the highest since January. The August volume was the second highest since then and contrasted with typical volumes of around 34,000 tonnes/month in the five months to June.The rise in shipments coincided with a seasonal slowdown in demand in markets like China and India.Asia’s Group II base oils prices extended their rise relative to crude and gasoil prices in July and August even with the seasonal slowdown in demand and the rise in shipments from markets like Taiwan.The rising margins pointed to firmer-than-usual supply-demand fundamentals for the time of year even with those additional shipments.Taiwan’s base oils exports included a rebound in shipments to China in August to a seven-month high of more than 24,000 tonnes.The last time its monthly exports to China exceeded 20,000 tonnes was in January.Exports fell in the intervening months amid a combination of muted demand, sufficient supply and less competitive prices after China removed tariff concessions on base oils imports from Taiwan from mid-June.The rebound in shipments to China in August pointed to a change in some of those dynamics.China’s Group II base oils output fell sharply from June and held at lower levels over the following months to August.The drop in output coincided with a rise in the country’s Group III base oils production.The rise in shipments from Taiwan helped to cover more of China’s Group II base oils requirements.That cover could also have allowed its domestic refineries to focus on boosting Group III base oils production.The rise in shipments from Taiwan also coincided with a sustained rebound in the premium of China’s domestic Group II light-grade prices over FOB NE Asia cargo prices since end-May.The widening premium made the arbitrage to China more feasible and pointed to tighter Group II supply relative to demand..China’s Aug base oils output edges up.Taiwan’s July base oils exports rise
