Singapore July base oils exports fall

Singapore’s base oils exports stayed low in a narrow range in July amid a sustained slowdown in shipments to China.

Total exports of 169,290t in July fell from 179,560t the previous month, government data showed. Exports had averaged more than 260,000 t/month in 2019, the year before the pandemic struck.

Total base oils exports of 1.17mn t in the first seven months of the year rose by 11pc from 1.05mn t during the same period last year.

Even with the increase in shipments, the volume was still the second lowest for that period in more than six years.

Singapore’s low export volumes last year added to regional supply tightness during the first half of the year.

Strong demand from southeast Asia, China and India compounded the tightness and triggered a surge in prices.

The city-state’s low export volumes this year helped limit the supply surplus. The contrast with last year mostly reflected the impact of the sustained slowdown in demand from China.

The country’s drop in base oils requirements left regional refiners with unexpected surplus supplies. Some of them have redirected the supplies to more distant markets, where demand has been stronger.

Some of them have sought to lower base oils output and produce more middle distillates instead.

Weak Asia-Pacific base oils prices relative to crude and strong diesel prices relative to crude added to the attraction of such moves.

The slowdown in Chinese demand continued through July.

Singapore’s base oils exports of 23,760t to China in July fell from more than 35,000t in June to a 25-month low.

Exports to the country averaged more than 46,000 t/month in 2021 and more than 54,000 t/month in 2020.

Base oils exports to China have remained low in August. But they showed signs of rising from the July levels.