Spore’s January exports to SE Asia slip

Singapore’s base oils exports to southeast Asia fell to an eight-month low in January, highlighting the impact of rising demand in other markets like China.

The city-state’s exports to southeast Asian markets like Indonesia surged in 2022 to meet strong demand in the region.

Last year’s slump in lube consumption in China freed up more regional supplies to move to markets like southeast Asia and India.

This year’s gradual revival in Chinese demand raised the prospect of increasing competition for the same supplies.

Any pick-up in base oils requirements from Japan would add to competition from northeast Asia.

Singapore’s base oils exports of little more than 55,000t to southeast Asia in January fell from more than 56,100t in December to the lowest since last May.

Exports to the region had averaged more than 68,000 t/month in the six months to November.

The lower supplies contrasted with a rise in Singapore’s shipments to northeast Asia to more than 58,000t in January.

The volume exceeded shipments to southeast Asia for the first time in ten months.

Besides rising flows to China, Singapore’s exports of more than 16,000t to Japan in January were the highest in more than six years.

Shipments to Japan are typically less than 4,000 t/month.

The rise in shipments followed the closure of a Group I plant in Japan late last year and came ahead of planned maintenance work in the country over the coming months.

Buyers in southeast Asia were able to replenish stocks in January with a swathe of shipments from South Korea and Taiwan.

The shipments moved to southeast Asia amid weaker-than-expected Chinese demand in January.

But firmer demand in February raised the prospect of more supplies moving to China, mirroring the flow of Singapore’s shipments in January.

The shipment of more base oils supplies to China would curb availability for other regions unless supply rose.

Asia-Pacific refiners were likely to be wary about any substantial rise in production amid concern about a build-up of surplus supplies if the strength of the pick-up in Chinese demand lags expectations.

Such a scenario already materialized in January.