Indonesia Aug base oils imports steady

Indonesia’s base oils imports held firm in August as strong economic growth boosted the country’s lubricants consumption.

Imports of 42,040t in August fell from 46,540t the previous month, government data showed. The volume was still the third highest this year and up 30pc from year-earlier levels.

The country’s base oils imports have risen in eleven of the last 12 months from year-earlier levels, boosting total shipments to 329,100t so far this year.

The record-high volume was up 30pc from less than 254,000t during the same period last year.

Imports rose to cover strong domestic lube demand as robust consumer spending and booming commodities exports supported healthy economic growth.

The Asian Development Bank last month raised its economic growth forecast for Indonesia to 5.4pc, from 5pc previously.

The strong growth included automobile sales, which rose in August for the 17^th time in 18 months.

The trend boosted demand for higher-quality lubricants and the base oils feedstock to produce the lubricants.

Indonesia is home to a Group I base oils plant. But it has no Group II production capacity.

Rising demand for higher-quality base oils has triggered a surge in imports from Group II suppliers such as Singapore and South Korea.

The trend has also provided other sources like Taiwan with a valuable outlet for surplus supplies.

China is typically the largest market for Group II base oils from Taiwan.

The slowdown in economic activity in that market this year forced supplies from Taiwan to target other outlets instead, such as Indonesia.

Indonesia’s base oils imports from Taiwan rose in August to a more-than three-year high of 9,610t.

Imports of more than 22,600t from Taiwan in the first eight months of the year were up from less than 18,000t in 2021 and less than 10,000t in each of the two years before that.

The rise in supplies from Taiwan to Indonesia increased competition for Singapore and South Korea.

But the rising size of Indonesia’s base oils market gave room for all three producers to boost their shipments to the southeast Asian country so far this year.