Singapore’s Dec base oils exports fall

Singapore’s base oils exports fell in December for a fourth month, prolonging a regionwide drop in supplies.

The fall in shipments added to a slowdown in base oils exports in December from other key producers in the region such as South Korea and Taiwan.

The regionwide slowdown in production and exports gathered pace in October, when weak Chinese demand and an economic slowdown in key markets like Europe raised concern about a persistent supply surplus.

Chinese demand is now expected to revive over the coming months following the ending of its zero-Covid policy late last year.

Europe’s economy got a boost from lower-than-expected energy costs so far this winter.

The disparity between lower supply and firmer demand raised the prospect of tighter fundamentals over the coming months, especially if prices remain at levels that deter a rise in base oils production.

Singapore’s base oils exports of 140,970t in December fell from an already-low 144,440t the previous month, government data showed.

Exports of little more than 412,000t in the fourth quarter of the year fell from close to 490,000t in the third quarter to the lowest since first-half 2020.

The city-state’s base oils exports of 1.90mn t in 2022 still rose by 4pc from 1.83mn t the previous year.

The slowdown in shipments in recent months cut the size of the increase from 10pc growth in the first half of the year.

The fall in shipments in December partly reflected another drop in exports from domestic sources.

A slowdown in supplies from domestic sources has previously often coincided with plant maintenance work or run cuts.

Singapore’s base oils exports showed signs of reviving in January ahead of a regionwide seasonal rise in demand as well as plant maintenance work in the island-state at the end of the first quarter.