Taiwan’s base oils exports rose to a three-month high in June, extending a steady wave of higher-than-usual shipment volumes since early this year.The rise in shipments contrasted with and helped to balance out a sustained dip in exports from South Korea especially so far this year.The rise in Taiwan's total exports also contrasted with a fall in its shipments to China.The dynamic extended a trend of increasingly large volumes moving instead to other markets like southeast Asia and India, and more recently to outlets like the Middle East and Pakistan.The recent sharp rise in China’s domestic Group II price-differentials for imported base oils pointed to tighter fundamentals for supplies from sources like Taiwan.The tighter fundamentals in turn partly reflected the diversion of ever-increasing volumes to other markets instead of China.Any change in those trade flows in unlikely any time soon.Taiwan’s total base oils exports came to 47,900 tonnes in June, government data showed..The volume rose from 46,800 tonnes the previous month, for the eighth time in nine months from year-earlier levels and from typical levels of less than 42,000 tonnes in 2024.The unusually steady flows at elevated levels since February also contrasted with more volatile monthly volumes in recent years.The steady volumes helped to meet sustained buying interest in markets like India this year.They also began to build market share in other outlets like Pakistan.Exports of almost 12,000 tonnes of Group II base oils to that market in first-half 2025 were up from less than 10,000 tonnes during the previous ten years combined.The diversification of shipments to more markets could help to cushion against the impact of an expected rise in Asia’s base oils production capacity in the coming months, when several new units are set to start operations.The diversification of shipments also cuts further the role of China as a key outlet for Taiwan’s base oils supplies.China accounted for less than 35% of Taiwan’s total base oils exports in first-half 2025. The share was down from 40% in 2024 and 47% in 2023.Pakistan and the UAE by contrast saw their share of Taiwan’s exports hold at 10% of the total in the first half of the year. The share was similar to 2024, mostly because of the surge in shipments to Pakistan, and up from 3% in 2023.The rise in exports to other markets could complicate the speed of any pick-up in shipments to China in response to any rise in demand in that market.The premium of China’s domestic Group II N150 price for imported supplies over the price for domestic supplies rose in early-July to the highest level in almost a year.It also rebounded relative to FOB Asia cargo prices, boosting the feasibility of lining up arbitrage shipments to China.Concern that any such price-strength is likely to be temporary, and steady demand in other markets for Taiwan’s supplies, could deter any immediate response to the higher prices..China’s June base oils output falls.Asia’s May lube demand falls.India’s May base oils imports stay high
