Asia-Pac base oils exports to Africa fall

Asia-Pacific base oils exports to East and South Africa extended their fall in August amid signs of a structural shift in flows to the region.

The slowdown coincided with a surge in shipments from the Netherlands to the region.

Exports of around 5,320t to Kenya, Tanzania and South Africa combined fell from 10,690t the previous month and by 59pc from year-earlier levels, government data showed.

The export volumes, from Singapore and South Korea, fell in August for the seventh time in eight months.

The slowdown cut total exports to the region to 25,210t in the first eight months of the year. The volume was down 75pc from more than 100,000t during the same period last year.

Base oils exports slumped despite relatively steady demand in those African countries. They slumped even with sufficient supply in Asia-Pacific to meet their demand requirements.

The fall in shipments instead added to the supply surplus in the Asia-Pacific region.

Base oils prices in Asia-Pacific have faced sustain pressure this year becuase of persistent surplus supplies.

The fall in exports coincided with a surge in shipments from the Netherlands to Kenya and South Africa.

Its exports to those two countries rose to almost 76,000t in the first seven months of the year. The volume was up from just 13,000t during the same period last year.

The surge in shipments from the Netherlands to those countries and the sharp fall in exports from Asia-Pacific began in January.

Before that month, exports from Asia-Pacific had almost always far exceeded the volumes from the Netherlands.

The rise in exports from the Netherlands to the African countries in turn lowered its availability of supply for buyers in other markets.

The Netherlands' supply was already smaller than usual amid a sharp fall in its base oils production in the first half of the year.