Spore's July base oils imports stay low

Singapore’s base oil imports fell in July to a six-month low, contrasting with the surge in shipments to the island-state during the same time last year.

Total imports of 47,540t in July fell from 60,540t the previous month and for a 12^th straight month from year-earlier levels, government data showed.

The sustained drop in shipments cut Singapore’s total imports to 422,360t in the first seven months of the year. The volume was down 35pc from 651,360t during the same period last year.

Regional base oils prices were unusually high during first-half 2021 even with the wave of cargoes moving to Singapore.

Base oils prices have been unusually weak so far this year, even as Singapore’s base oil imports have slumped.

The lower supplies added to a drop in regional availability. Asia-Pacific base oil exports fell by 3pc in the first half of the year amid a drop in shipments from suppliers like South Korea and Taiwan.

Regional base oils availability remained plentiful, even with the drop in supplies. The ready availability reflected the impact of persistently weak demand from China.

The weaker supply-demand fundamentals have regional pressured prices and kept shut the arbitrage from Europe to Asia-Pacific.

The complete halt in cargo shipments from Europe to Singapore over the last three months reflected the impact of the closed arbitrage.

The trend cut Singapore’s base oils imports from Europe to 37,030t in the first seven months of the year. The volume was down from more than 300,000t during the same period last year.

High European base oils prices and unexpectedly tight supply in that market in the first half of the year made unfeasible a repetition of such large flows to Asia-Pacific.

The high prices and tight fundamentals instead kept supplies in Europe.

The retention of more supplies that had previously moved to overseas markets failed to prevent a surge in European prices.

But it helped to cover regional requirements in the face of lower shipments from Italy and Russia.