Singapore August base oils imports rise

Singapore’s base oils imports rose to a three-month high in August on the back of a sustained pick-up in shipments from China.

Imports of 67,090t in August rose from 47,540t the previous month and by 23pc from year-earlier levels, government data showed.

The year-on-year increase was the first in 13 months.

Imports had fallen sharply in the intervening months because of a slump in shipments from Europe.

Imports from Europe had previously surged over 19 months to end-2021.

The supplies had helped to cover for a drop in base oils production in the island-state during most of that period, as well as unusually tight supply and strong demand in the Asia-Pacific region.

A recovery in base oils production, and weaker supply-demand fundamentals in Asia-Pacific, removed the need for those supplies.

Singapore’s base oils import volumes have reverted in response closer to their pre-pandemic levels of around 50,000 t/month.

The trend contrasted with Singapore’s base oils exports, which remain far below pre-pandemic levels.

Imports remained slightly higher than pre-pandemic levels because of persistently high shipments from Japan so far this year. An unusual rise in flows from China added to the supplies.

The high volumes from Japan partly reflected the country’s high refinery run rates and light round of maintenance work this year.

The volumes are likely to fall following the imminent closure of one of Japan’s Group I base oil units in the coming weeks.

Imports from China rose in recent months as weak domestic demand and higher prices in overseas markets prompted producers to export the surplus volumes.

The shipments added to the regional supply surplus.

The halt in base oils imports from Europe helped to ease the supply tightness in that region.

Europe had supplied more than 319,000t of base oils to Singapore in the first eight months of last year.

The volume fell to little more than 37,000t during the same period this year and to less than 300t in the four months to August.

The difference of more than 280,000t was the equivalent of around 90pc of the production capacity lost through the prolonged shutdown of a key Group I base oils unit in Italy during the first half of the year.