Spore’s Feb base oils imports steady

Singapore’s base oils imports held steady in February as the arrival of another large shipment from the Netherlands countered a slowdown in supplies from Japan.

The surge in shipments from the Netherlands since late last year coincided with oversupply, weak demand and falling prices in the European market.

Supply-demand fundamentals and prices in Europe stayed weak during the first few months of this year even with the transfer of a large volume of supplies to Singapore.

Supply-demand fundamentals in Asia-Pacific stayed more balanced and prices steadier so far this year even with the additional volumes from Europe.

Regional demand got support from a gradual recovery in buying interest in China.

A round of plant maintenance work in the Asia-Pacific region, including in Singapore, is likely to keep a cap on regional supply.

The flow of supplies from Europe to Singapore is also likely to ebb in the coming months as a seasonal rise in demand in that region absorbs more supplies.

Singapore’s base oils imports of more than 65,700t in February rose by little more than 500t from the previous month, government data showed.

Imports held close to that level for the third time in four months.

The steady import volumes masked a sharp change in the composition of the shipments.

Almost half of Singapore’s February base oils imports consisted of supplies from the Netherlands. Less than a quarter of the volume originated from Japan.

Japan accounted for more than 40pc of Singapore’s base oils imports in January. There were no supplies from the Netherlands that month.

The rise in imports from Japan in January was more of an outlier.

Imports from the northeast Asian country trended lower since last September. The February volume of little more than 14,600t was the second lowest in thirteen months.

The March volume showed signs of being even lower.

The slowdown in shipments followed the closure of a Group I base oils plant in Japan at end-September.

It comes ahead of a round of plant maintenance work in the country over the coming months and then the closure of another base oils plant later in the year.

The trend raised the prospect of a further slowdown in Group I supplies from Japan over the coming months and uncertainty about the source of a substitute for the supplies.

Singapore’s imports from Japan consist mostly of Group I base oils.

Singapore’s imports from the Netherlands likely consist mostly of Group II base oils.