Shipments from South Korea more than double from September
Imports of Group II heavy grades also more than double
Competition for markets like Pakistan intensifies as global supplies rise
Pakistan’s base oils imports surged to an eight-month high in October, lifted by sharply-higher flows from South Korea and a rebound in Group II heavy-grade shipments.
The country imported more than 36,000 tonnes of base oils in October, over double September’s volumes, government data showed.
Shipments from South Korea more than doubled from September, giving the country an over-50% share of Pakistan’s total imports for a second month.
The share was up from around 36% in the first eight months of the year and more in line with supply patterns in 2022 and 2023.
Supplies of Group II heavy-grade base oils also more than doubled month-on-month, reflecting Pakistan’s persistent and unusually strong appetite for the premium high-viscosity base oils.
Pakistan’s sustained recovery in domestic lube demand this year, combined with its growing need for heavy grades, make the country an increasingly valuable outlet at a time when overseas supply is set to expand sharply over the coming year.
South Korea, and to a lesser extent Singapore, have been Pakistan’s dominant suppliers in recent years.
But the market has become more fragmented, after US shipments surged this year and last year, eroding Asian suppliers’ market share.
A surge in supplies from Taiwan this year added another layer of competition.
The economics of moving US Group II heavy-grade supplies to Pakistan got a boost earlier this year when Asia faced tight supply and high prices.
US shipments extended into the second half of the year even as Asia’s market flipped from tightness to a growing surplus.
US prices remained competitive versus Asia prices despite the regional surplus.
The prospect of rising Asian supply over the coming months could increase pressure on regional producers to defend or expand market share in outlets like Pakistan and to complicate the economics of bringing in additional US volumes.
