Indonesia’s Oct Grp III exports stay low

Indonesia’s Group III base oils exports stayed lower than usual in October for a third month even amid firm prices and demand in markets like the US.

The drop in shipments coincided with Group III base oils maintenance work in the Mideast Gulf and northern Europe, adding to the tighter availability.

The sustained slowdown in shipments showed signs of extending into November, and having the largest impact on flows to the US.

Exports slowed despite US Group III prices maintaining a steep premium to prices in other regions.

Indonesia's total base oils exports of 17,690t in October were down from 23,700t the previous month and up from 8,010t in August, government data showed.

All the volumes were well below typical monthly export levels of more than 30,000 t/month.

A drop in exports in March had coincided with Group III plant maintenance work at Dumai.

The fall in shipments in recent months similarly suggested a change from typical production plans, such as maintenance work or run cuts.

Refiners sometimes cut run rates in response to weak margins.

Global Group III base oils margins remained firm, especially in the US.

Base oils exports of 2,700t to South Korea fell from around 12,000t the previous month to the second lowest in almost two years. The lowest had been in August.

Some of the supplies that move to South Korea are then re-exported on to the US.

The slowdown contrasted with a rise in shipments to China in October to a 21-month high of 4,300t.

Exports to China had slumped in the first nine months of the year as a slowdown in economic activity slashed lube consumption in the country.

Chinese demand for regional supplies picked up in recent months but remained lower than usual.

Demand could get a further boost following the increasingly widespread relaxation of Covid-19 restrictions in the country in recent weeks.

Exports to the Netherlands edged up in October to a four-month high of 10,700t.

Exports to the country held firm despite the ongoing slowdown in European lube demand and the widening discount of regional Group III prices compared with the US.