Spore’s Dec imports from NE Asia fall

Singapore’s base oils imports from Japan and South Korea fell in December to an eleven-month low, adding to signs of tighter availability in the Asia-Pacific market at the end of last year.

The island-state’s base oils imports rose to a nine-month high in December on the back of an unusual surge in shipments from the Netherlands.

Excluding those supplies, Singapore’s imports fell in December to a fourteen-month low.

Supplies from Japan and South Korea combined typically account for most of Singapore’s base oil imports.

The drop in supplies from those countries likely partly reflected weaker demand amid persistent downward pressure on prices.

It also highlighted the impact of lower base oils production and exports from northeast Asia at the end of last year.

The drop in exports curbed any significant supply-build in outlets like Singapore, leaving supply better balanced at the start of this year.

There were signs of a pick-up in shipments from northeast Asia to Singapore in January. But the volume remained lower than usual. There were also so far no supplementary shipments from Europe.

Any extension of the drop in base oils exports from northeast Asia into the first quarter of the year would coincide with an expected pick-up in Chinese demand after the lunar new year holidays.

Singapore’s base oils imports of 14,300t from Japan in December fell from almost 18,000t in November to the lowest since last January.

Singapore's imports from Japan are likely to fall this year because of a combination of lower production capacity and scheduled plant maintenance work.

One plant in Japan was closed permanently at the end of the third quarter of last year. Another plant is scheduled to be closed later this year.

Singapore’s imports from South Korea dipped to less than 6,400t in December. The volume fell from 14,800t in November to a fourteen-month low.

The slowdown reflected a slump in South Korea’s base oils exports to a 31-month low in December as refiners continued to operate at low run rates in response to weak margins.

Regional base oils prices fell early this year to even lower levels versus crude and diesel.

The low margins provide little incentive for refiners to raise production ahead of a seasonal rise in demand in southeast Asia and China over the coming months.