Thailand’s July base oils exports rise

Thailand’s base oils exports rose in July to their second-highest level this year, clearing surplus volumes during a seasonal slowdown in domestic demand.

Exports rose even as the country’s domestic base oils output stayed lower than usual and with the arbitrage to China shut.

Exports of 16,700 kilolitres (14,790t) in July more than doubled from less than 8,000kl the previous month and by 2pc from year-earlier levels, government data showed.

Base oils exports of 99,650kl in the first seven months of the year were still down 13pc, or more than 15,000kl, from 114,720kl the same time last year.

The drop in shipments was smaller than the country’s 31,150kl fall in base oils production during the same period.

It was larger than the drop of less than 1,000kl in the country’s base oils imports during the same period.

Base oils output and imports fell even as Thailand’s lube consumption surged.

The trend highlighted Thailand’s domestic consumption of a larger share of its own Group I base oils supplies at a time when regional prices for the product were unusually weak.

The weak base oils prices mostly reflected the impact of a sustained slump in Chinese demand.

Thailand’s pause in base oils exports to China continued in July for the third time in four months.

China is a key outlet for Thailand’s surplus heavy-grade base oils like bright stock.

Buyers in other markets like India preferred to hold back amid a seasonal slowdown in domestic demand and expectations that prices would fall.

Almost all of Thailand’s July exports moved instead to Singapore.

Shipments of some 16,580kl to the island-state were the highest in 13 months and up from more typical levels of less than 9,000 t/month.