Thailand’s Oct base oils output slumps

Thailand’s base oils output fell to a multi-year low in October because of maintenance work at both the country’s Group I plants at the same time.

The drop in output cut availability for domestic and overseas markets and added to a regionwide trend of lower supply compared with the third quarter of the year.

Regional base oils prices steadied in the fourth quarter of the year amid more balanced supply-demand fundamentals.

Prices also rose strongly relative to crude and diesel prices during the fourth quarter.

But they remained weak versus crude and diesel compared with historic prices, even with the sharp drop in supplies from markets like Thailand.

The country’s base oils output of 20,490 kilolitres (18,150t) in October fell by more than half from 52,470kl the previous month, government data showed.

The volume was the lowest in more than a decade.

Output from Thailube’s 260,000 t/yr Group I unit fell to a five-year low of less than 16,300kl, from typical levels of more than 22,000 kl/month.

Output from IRPC’s 320,000 t/yr Group I plant fell more steeply to 4,280kl. The volume was down from more typical levels of more than 30,000 kl/month and the lowest in more than a decade.

The refiners’ plant maintenance work typically takes place at different times from each other, curbing the impact of the shutdowns.

The shutdowns also followed a surge in Thailand’s base oils exports in September to a one-year high, cutting inventory levels.

But the timing of the shutdowns, at the start of the fourth quarter, coincided with more muted demand in the region.

Plant shutdowns that take place in the first and second quarters of the year typically have a larger impact because they coincide with a seasonal rise in demand.