Singapore's Aug base oil exports steady

Singapore’s base oils exports held in a low, narrow range in August amid a seasonal slowdown in demand and fall in prices.

Base oils exports of 165,370t in August fell from 169,290t the previous month, government data showed.

The volume was in the middle of a 155,000-175,000 t/month range that shipments have held in in eight of the last 10 months.

The range was only slightly higher than average shipments of around 152,000 t/month in the first half of 2021.

Asia-Pacific base oils prices had surged during first-half 2021 because of strong demand in China, southeast Asia and India. Supply was also unusually tight.

The price levels were also unusually high relative to crude and diesel.

Singapore’s low base oils exports during that period had added to the supply tightness.

Asia-Pacific prices have risen much less strongly this year and remained unusually weak relative to crude and diesel.

Prices struggled to keep pace with crude even with exports from Singapore only slightly higher than its 2021 levels and still well below their pre-pandemic levels.

Demand from southeast Asia and India has also been strong.

The disconnect mostly reflected the impact of the sharp slowdown in Chinese base oils demand throughout most of the year.

The base oils price weakness closed the arbitrage to move supplies from other regions to Asia-Pacific.

A repercussion has been a rise in Singapore’s exports of base oils originating from domestic sources and a drop in exports of supplies originating from other sources.

Exports from domestic sources rose to more than 140,000t in August and accounted for some 85pc of Singapore’s total exports that month. The share was the highest this year.