SK Enmove, the world’s largest Group III base oils producer, saw its profit margin fall in the first quarter to the lowest in more than two years.

The profit margin of 19.90pc in the first three months of the year fell from 20.71pc during the previous quarter and from 20.29pc during the same period last year.

The margin was down from more than 28pc in 2021.

The margin remained higher than average levels of less than 13pc in the four years before 2021.

The firm margins reflected the steep premium of Group III base oils prices over feedstock prices and over Group I and Group II prices in recent years.

Parent company SK Innovation expected a “solid spread” in the second quarter of the year in response to a seasonal rise in demand.

Group III supply is also set to fall because of plant maintenance in Europe and South Korea.

The maintenance work includes one of SK Enmove’s base oils units.