Vietnam’s July base oils imports dip

Vietnam’s base oils imports fell in July even as the country’s economy extended its strong rebound.

Base oils imports of 19,080t in July fell from 23,920t the previous month and by 8pc from year-earlier levels, provisional customs data showed.

Imports of 139,050t in the first seven months of the year remained higher than year-earlier levels of 129,670t.

The higher volume reflected the 45pc surge in imports in the first quarter of the year. Imports fell by 13pc in the following four months to July.

Base oils imports fell even as Vietnam’s economy extended its strong recovery. Economic growth surged in the third quarter at its fastest pace in years.

Automobile sales rose in July for a seventh month, and industrial production for a ninth month. The country’s manufacturing purchasing managers’ index rose in September for a twelfth month.

But a slowdown in the country’s export growth in July highlighted the risk of slowing economic activity in key overseas markets.

The fall in base oils imports also coincided with expectations of a drop in regional base oils prices that duly materialized.

Buyers typically prefer to hold back procurement until they are comfortable that they face less exposure to the risk of lower prices.

The slowdown in demand coincided with a seasonal drop in lube consumption in markets like Thailand and India. The weaker demand compounded the regional supply surplus and pressure on prices.

South Korea and Singapore combined accounted for 90pc of Vietnam’s July base oils imports. But a year-on-year drop in shipments from Singapore in July contrasted with higher volumes from South Korea.

The trend extended beyond July.

South Korea’s 41pc share of Vietnam’s base oils imports so far this year was up from a 32pc share in 2021. The higher share of imports was mostly at the expense of Singapore.