China’s base oils imports rose in June, more than covering for a dip in the country’s base oils output that month and lifting total supply to a three-month high.Total imports of 153,400 tonnes in June rose from 108,700 tonnes in May, government data showed.Exports by contrast fell in June to a nine-month low of 4,400 tonnes.Net supply, or output and net imports combined, duly came to more than 575,000 tonnes in June.The volume rose from 534,300 tonnes the previous month and by 7% from year-earlier levels.The rise in China’s base oils supply coincided with a seasonal slowdown in demand at the end of the second quarter and start of the third quarter of the year.The rise in supply pointed either to a recovery in demand or to the prospect of a build-up of surplus volumes at the start of the third quarter of the year.Any build-up of surplus volumes could magnify a typical slowdown in China’s base oils requirements during that period.The rise in imports in June more than covered for plant maintenance work in China that month.The rise in imports also coincided with a recovery in China’s domestic Group II base oils price premium to FOB NE Asia prices from late-May.The firmer base oils premium boosted the feasibility of lining up more arbitrage shipments from Asia to move to China.A more feasible arbitrage to China suggested the country’s supply remained relatively tight even after the rise in volumes in June.China’s domestic price premium to FOB NE Asia prices extended its rise through first-half July before edging lower last week.The lower premium could be a temporary pause, with rising supply pointing to an improvement in demand.The lower premium could also be the start of a reversal as buyers seek to limit arbitrage flows and trim a build-up of surplus supplies..China’s June base oils output falls
China’s base oils imports rose in June, more than covering for a dip in the country’s base oils output that month and lifting total supply to a three-month high.Total imports of 153,400 tonnes in June rose from 108,700 tonnes in May, government data showed.Exports by contrast fell in June to a nine-month low of 4,400 tonnes.Net supply, or output and net imports combined, duly came to more than 575,000 tonnes in June.The volume rose from 534,300 tonnes the previous month and by 7% from year-earlier levels.The rise in China’s base oils supply coincided with a seasonal slowdown in demand at the end of the second quarter and start of the third quarter of the year.The rise in supply pointed either to a recovery in demand or to the prospect of a build-up of surplus volumes at the start of the third quarter of the year.Any build-up of surplus volumes could magnify a typical slowdown in China’s base oils requirements during that period.The rise in imports in June more than covered for plant maintenance work in China that month.The rise in imports also coincided with a recovery in China’s domestic Group II base oils price premium to FOB NE Asia prices from late-May.The firmer base oils premium boosted the feasibility of lining up more arbitrage shipments from Asia to move to China.A more feasible arbitrage to China suggested the country’s supply remained relatively tight even after the rise in volumes in June.China’s domestic price premium to FOB NE Asia prices extended its rise through first-half July before edging lower last week.The lower premium could be a temporary pause, with rising supply pointing to an improvement in demand.The lower premium could also be the start of a reversal as buyers seek to limit arbitrage flows and trim a build-up of surplus supplies..China’s June base oils output falls