Asia’s March base oil exports rise

Base oil exports from Asia-Pacific rose in March to a four-month high as a rebound in shipments from South Korea and Singapore countered a slowdown in supplies from Indonesia.

Exports of 710,350t from Asia-Pacific in March rose by 3pc from the previous month to the highest since November, government data showed.

Even with the increase in shipments, exports of 2.07mn t in the first three months of the year fell from 2.13mn t in the fourth quarter of last year and by 5pc from 2.17mn t during the first three months of 2021.

Regional base oil prices surged during that period in early 2021, even with the rise in supply. Prices rose much faster than crude and diesel values as strong demand everywhere from China to southeast Asia and India outpaced supply.

Regional base oil prices also rose during the first three months of this year. But prices lagged the rise in crude and diesel prices, even with the lower volume of supplies.

The trend left base oil producers’ margins increasingly squeezed.

Prices lagged feedstock prices as supply remained sufficient to cover demand.

Asia-Pacific base oil exports rose in March even as plant maintenance work in Indonesia slashed shipments from that market.

A pick-up in shipments from South Korea and a rise in exports from Singapore to a six-month-high more than covered for the slowdown in shipments from the southeast Asian country.