Indonesia’s Oct base oils imports rise

Indonesia’s base oils imports rose to a seven-month high in October as firm economic growth boosted lubricants consumption.

The country has been a key outlet for Asia-Pacific base oils producers this year as rising demand for premium-grade base oils helped to cushion the impact of a slump in lube demand in China.

Its growing demand for base oils imports increased the impact of any slowdown in such shipments.

Signs of lower imports in November from October coincided with rising pressure on economic activity in the face of slowing overseas demand and rising interest rates.

But the slowdown in flows remained muted, especially for supplies from Singapore.

Indonesia’s base oils imports of 47,770t in October rose from 43,230t the previous month to the highest since March, government data showed.

The sustained rise in shipments in seven of the last eight months boosted total imports to 420,100t in the first ten months of the year.

The volume was up 20pc from 351,090t during the same period last year.

The surge in supplies helped to feed strong lubricants consumption in the face of firm economic growth.

The country’s central bank forecast economic growth this year at the upper end of a 4.5-5.3pc range.

It forecast similarly strong economic growth next year, even in the face of a steady rise in interest rates and higher fuel prices.

Strong automobile sales reflected that growth. Sales rose in October for the 19^th time in twenty months.

Retail sales continued to rise strongly in September even after the implementation of a steep rise in fuel prices that month.

Indonesia’s strong demand for Group I and premium-grade base oils has been a boon for its domestic refiner and the region’s key suppliers of the products.

The country’s imports from South Korea rose in October to a seven-month high of more than 15,200t.

Imports of 118,500t from the northeast Asian country in the first ten months of the year were up 9pc from year-earlier levels.

Imports from Singapore rose even more strongly. Shipments of more than 27,500t in October held close to record-high levels.

Total imports of 235,960t from the island-state in the first ten months of the year were up 26pc from less than 190,000t during the same period last year.

Singapore had sufficient supplies to meet Indonesia’s requirements partly because of the slowdown in demand from China.

Chinese demand is expected to improve over the coming months following the increasingly rapid relaxation of zero-Covid measures in the country.