Thailand’s June base oils output falls

Thailand’s base oils output fell in June close to levels in February when production was affected by plant maintenance work.

Output of 46,920 kilolitres (41,560t) in June fell from 61,000kl the previous month, government data showed. The volume was the lowest since February, when output dipped to 45,980kl.

The volume contrasted with average base oils output of around 59,000 kl/month in 2021.

Thailand’s base oils production had fallen in February because of scheduled plant maintenance work.

The similar size of the drop in output in June suggested similar reasons behind the lower production levels.

The lower output reflected a fall in IRPC’s base oils production to 20,420kl in June, from almost 31,000kl the previous month.

IRPC operates a 320,000 t/yr Group I base oils plant at Rayong.

Thai Lube’s base oils output was steadier at around 22,180kl.

Thailand’s refiners have had less incentive to maximise base oils output this year as regional prices struggled to keep pace with higher feedstock and diesel prices.

The trend contrasted with the unusually large base oil premium to crude and diesel prices during first-half 2021.

Lower regional base oils prices reflected the more balanced supply-demand fundamentals in Asia-Pacific this year.

The scant market reaction to the drop in Thailand’s base oils output in June reflected the healthier supply availability.

Domestic Chinese prices for bright stock have faced growing downward pressure even as exports from Thailand to China slumped during the second quarter of the year.