Spore’s November base oils imports rise

Singapore’s base oils imports rose to a six-month high in November following the delivery of a rare shipment from Europe.

Any extension of that trend raised the prospect of adding additional supplies to a region that had struggled with a persistent surplus throughout the year.

The regional surplus had dwindled in recent months because of lower refinery run rates and maintenance work. A wave of arbitrage shipments to other regions in the third quarter of the year also cut supply.

The pick-up in supplies from Europe to Singapore in November reversed that trend.

The flow of supplies from Europe to Singapore in December was set to be even larger.

The arrival of the November shipment from the Netherlands helped to boost Singapore’s total base oils imports to 67,110t in November.

The volume rose from 56,550t the previous month to the highest since May.

An even larger shipment from the Netherlands reached Singapore in early December.

The market impact depended on the continuation of such shipments and the reason for such flows.

Scheduled plant maintenance work in Singapore was set to take place at the end of the first quarter of 2023.

The timing of the maintenance work was set to coincide with a seasonal rise in demand in Asia-Pacific and especially in China.

The shipments from the Netherlands could reflect moves to build stocks ahead of the maintenance work.

The shipments could alternatively reflect moves to clear surplus volumes from Europe at a time of year when demand was seasonally weak.

An economic slowdown in Europe added to the weakness as blenders sought to minimise stocks.

The Asia-Pacific market already struggled with persistent surplus supply this year even with the drop in shipments from Europe since May.

The resumption of flows from Europe to the region raised the prospect of extending that pressure into next year.