Thailand’s base oils output rose to a two-year high in July, boosting Group I supply in a region facing increasing tight availability of the grade.Base oils output of 61,800 kilolitres (55,000 tonnes) in July rose from 51,800 kilolitres the previous month to the highest since March 2022, government data showed.Thailand’s Group I base oils output fell in the first six months of the year from year-earlier levels even in the face of firm base oils margins and tight regional supply.The drop in production compounded increasingly tight availability of Group I base oils in Asia following plant closures in Japan and a closed arbitrage from Europe.Supply tightened further in the third quarter of the year following the unexpected shutdown of a major base oils unit in Japan.Asia’s Group I base oils production capacity is set to fall even more in the fourth quarter of the year following the planned closure of a major Group I unit in China.The drop in Group I supply boosted the incentive and need for regional blenders to maximise consumption of premium-grade base oils instead.For lube formulations where a complete switch was harder, the shrinking availability of Group I supply raised the prospect of boosting demand for base oils from Thailand.Thailand’s growing imports and consumption of premium-grade base oils could deter the country’s refiners from maintaining higher base oils output.The drop in Thailand’s base oils production volumes in the first half of the year could reflect such a dynamic.Even so, shrinking regional supply and firm regional Group I base oils prices relative to gasoil prices could provide sufficient incentive to raise production levels.The rise in Thailand’s base oils output in July could reflect such a move. .Japan’s July base oils supply stays lower.China’s July base oils output falls.S Korea’s July base oils output rises
Thailand’s base oils output rose to a two-year high in July, boosting Group I supply in a region facing increasing tight availability of the grade.Base oils output of 61,800 kilolitres (55,000 tonnes) in July rose from 51,800 kilolitres the previous month to the highest since March 2022, government data showed.Thailand’s Group I base oils output fell in the first six months of the year from year-earlier levels even in the face of firm base oils margins and tight regional supply.The drop in production compounded increasingly tight availability of Group I base oils in Asia following plant closures in Japan and a closed arbitrage from Europe.Supply tightened further in the third quarter of the year following the unexpected shutdown of a major base oils unit in Japan.Asia’s Group I base oils production capacity is set to fall even more in the fourth quarter of the year following the planned closure of a major Group I unit in China.The drop in Group I supply boosted the incentive and need for regional blenders to maximise consumption of premium-grade base oils instead.For lube formulations where a complete switch was harder, the shrinking availability of Group I supply raised the prospect of boosting demand for base oils from Thailand.Thailand’s growing imports and consumption of premium-grade base oils could deter the country’s refiners from maintaining higher base oils output.The drop in Thailand’s base oils production volumes in the first half of the year could reflect such a dynamic.Even so, shrinking regional supply and firm regional Group I base oils prices relative to gasoil prices could provide sufficient incentive to raise production levels.The rise in Thailand’s base oils output in July could reflect such a move. .Japan’s July base oils supply stays lower.China’s July base oils output falls.S Korea’s July base oils output rises
