Indonesia’s Jan base oils imports fall

Indonesia’s base oils imports fell to an eight-month low in January amid a slump in shipments from South Korea.

Imports fell even as South Korea’s base oils exports rebounded in January to a four-month high.

The slowdown coincided with the prospect of a rise in competition for Asia-Pacific base oils supplies in the face of an expected recovery in demand from China.

But the drop in Indonesia’s imports in January was likely an outlier.

China’s demand remained low in January before improving over the following months.

The strength of the pick-up in demand was so far relatively muted.

Regional supply remained sufficient to cover requirements in other markets even with the pick-up in Chinese demand.

Regional base oils prices also held in a narrow range even as Chinese demand improved.

There were signs of a rebound in Indonesia’s base oils imports from South Korea in the month of February.

The country’s base oils imports of less than 37,000t in January fell from more than 43,000t the previous month to the lowest since last May.

The volume was also lower than typical imports of more than 42,000 t/month over the past year.

The drop in imports coincided with an expected slowdown in Indonesia’s economic growth this year.

Its economy grew in the fourth quarter of last year at the slowest pace in more than a year.

Even if slower than last year, economic growth is likely to remain strong.

Indonesia’s automobile sales rose in January for an eighth month.

The country’s manufacturing purchasing managers’ index held firm in February amid strong output and rising new orders.

Strong economic and industrial activity supported sustained demand for lubricants and base oils.

Indonesia’s lower base oils imports from South Korea in January contrasted with a steady flow of shipments from Singapore and a jump in supplies from Taiwan.

The volume of supplies from Singapore showed signs of rising in February even as the island-state’s shipments to China also grew.

Signs of a rise in shipments from South Korea and Singapore in February would support a rebound in Indonesia’s supplies from the lower January volumes.