Indonesia’s Group I base oils exports stayed low in November, adding to a region-wide drop in supplies of the lubricant feedstock in the fourth quarter of the year.The low exports coincided with plant maintenance work in Thailand and a slowdown in shipments from Japan.Unusually weak Chinese lubricants consumption in 2022 cut that market’s demand for key heavy-grade products like bright stock.The weak demand curbed the impact of the drop in Group I supplies in the Asia-Pacific region during the final months of last year.An expected pick-up in Chinese demand over the coming months is set to increase competition for supplies such as bright stock.Stronger demand, and any ongoing drop in availability of those supplies, would likely generate a price reaction.The premium of Asia-Pacific Group I bright stock prices over light and heavy neutrals prices already rose at end-2022 to the highest in more than a year.Indonesia’s Group I base oils exports of 2,980t in November rose from 2,640t the previous month, government data showed..Exports held close to or below that level every month since May.The low volume cut total shipments to less than 17,000t in the seven months to November. The volume was down by almost half from exports of more than 33,000t in the first four months of the year.Shipments slowed partly because weak Chinese demand and low overseas prices cut the attraction of tapping the export market.A pause in cargo shipments to China since May extended into November. Rising demand and higher prices in Indonesia’s domestic market instead boosted the attraction of maximising domestic sales.The trend of firm domestic consumption is likely to continue over the coming months at the same time as a recovery in Chinese demand.Such a scenario would cut Indonesia’s surplus supply for overseas markets and limit its ability to raise exports in response to rising demand in the Asia-Pacific region..Thailand’s Nov base oil output stays low
