Vietnam’s Dec base oils imports fall

Vietnam’s base oils imports extended their slowdown in December as slowing economic growth cut lubricants consumption.

The fall in supplies also reflected a sustained drop in base oils exports from key sources like South Korea and Singapore.

The slowdown in supplies from those markets showed signs of extending into the beginning of this year.

More of the shipments from those markets were also likely to move to China.

The country's demand showed signs of reviving following the scrapping of its zero-Covid policy late last year.

The trend raised the prospect of rising competition for base oils shipments in the region, even with a slowdown in demand from markets like Vietnam.

The country’s base oils imports of less than 13,000t in December fell from around 20,600t the previous month, provisional customs data showed.

Imports of around 40,300t in the final three months of the year fell from more than 61,000t during the third quarter to the lowest in more than three years.

The drop in base oils imports mirrored a slowdown in Vietnam’s economic and industrial activity, curbing lubricants consumption.

The country’s industrial production barely rose in December before falling in January for the first time in fifteen months.

Vietnam’s automobile sales fell in December for a second month and at their fastest pace in more than a year.

The country’s economy is still forecast to grow strongly this year on the back of firm domestic consumption and a rebounding tourist sector.

Last year’s base oils imports rose by 11pc from 2021 to more than 220,000t.

The rise in imports provided regional suppliers with a key outlet to cushion against the impact of slumping demand from China.

Any subsequent pick-up in Vietnam's base oils imports this year would face growing competition for shipments as China absorbs more supplies.

Singapore accounted for almost 50pc of Vietnam’s base oils imports in 2022.

A slowdown in the city-state’s shipments to Vietnam in December coincided with a rise in its exports to China. The rise in its flows to China showed signs of continuing in January.