Thailand’s base oils supply climbed to a one-year high in March on the back of higher imports and a recovery in domestic production to the highest in seven months.Domestic Group I base oils production rose to 56,400 kilolitres (50,000 tonnes) in March, government data showed.The volume rose from less than 43,000 kilolitres in each of the first two months of the year to the highest since last August.Domestic refiner Thai Lube’s base oils output rose to a fourteen-month high. Rival IRPC’s production rose to a four-month high.Output fell in the first two months of the year because of plant maintenance work that affected both plants.Output fell from typical levels of more than 54,000 kilolitres/month in 2023.Asia’s Group I base oils prices rose relative to feedstock and competing fuel prices early this year partly because of tighter supply fundamentals in the region.Prices continued to hold firm in March and so far in the second quarter of the year even after the recovery in Thailand’s base oils output.The firm prices reflected still-tight Group I supply fundamentals in the region following the closure of a Group I base oils plant in Japan late last year.The recent closure of a Group I plant in Europe raised the prospect of curbing the volume of any additional arbitrage shipments from that region to Asia.Tighter Group I supply in Asia curbed availability of surplus volumes for markets like India and Middle East so far this year.Tighter supply and firmer prices also boosted the incentive for domestic and regional blenders to increase consumption of premium-grade base oils.A pick-up in shipments from South Korea and Qatar lifted Thailand’s base oils imports to a seven-month high in March.Both countries are key sources of premium-grade base oils.Thailand’s base oils supply, or domestic production and imports combined, duly rose to 87,400 kilolitres in March.The volume rose from less than 66,000 kilolitres in February to the highest in a year. .Japan’s March base oils supply rises
