China’s base oils output rose in December to the highest in almost two years on the back of a pick-up in Group II production.The steady rise in output raised the prospect of prolonging a slowdown in the country’s requirements for base oils from overseas markets.Total paraffinic base oils output of more than 445,000t in December rose from less than 430,000t the previous month and by 39pc from year-earlier levels, OilChem China data showed.Output rose from November as higher production of Group II base oils outweighed lower output of Group I and Group III supplies.Total output of close to 4.50mn t in 2023 rose by 4pc from around 4.30mn t the previous year.Output rose after lagging year-earlier levels by 10pc in first-half 2023. It remained close to 2mn t lower than production levels in 2021.A sustained rise in the country’s base oils output since August coincided with steady demand from domestic blenders.Rising output in turn curbed requirements for base oils supplies from overseas producers.The arbitrage to move base oils from Asia to China remained hard to work throughout second-half 2023 especially, ICIS data showed.A further rise in output would limit the benefit of a more sustained recovery in China’s lube consumption mostly to base oils producers in its domestic market.The impact on regional refiners could be relatively muted after they already moved in recent years to cut shipments to China and boost exports to other markets instead..China’s Nov base oils output rises
China’s base oils output rose in December to the highest in almost two years on the back of a pick-up in Group II production.The steady rise in output raised the prospect of prolonging a slowdown in the country’s requirements for base oils from overseas markets.Total paraffinic base oils output of more than 445,000t in December rose from less than 430,000t the previous month and by 39pc from year-earlier levels, OilChem China data showed.Output rose from November as higher production of Group II base oils outweighed lower output of Group I and Group III supplies.Total output of close to 4.50mn t in 2023 rose by 4pc from around 4.30mn t the previous year.Output rose after lagging year-earlier levels by 10pc in first-half 2023. It remained close to 2mn t lower than production levels in 2021.A sustained rise in the country’s base oils output since August coincided with steady demand from domestic blenders.Rising output in turn curbed requirements for base oils supplies from overseas producers.The arbitrage to move base oils from Asia to China remained hard to work throughout second-half 2023 especially, ICIS data showed.A further rise in output would limit the benefit of a more sustained recovery in China’s lube consumption mostly to base oils producers in its domestic market.The impact on regional refiners could be relatively muted after they already moved in recent years to cut shipments to China and boost exports to other markets instead..China’s Nov base oils output rises
