South Korea’s base oils output edged down in June, contrasting with a much steeper slide in the country’s base oils exports that month.Total output of 2.63 million barrels (371,000 tonnes) in June fell by 4% from 2.75 million barrels (387,000 tonnes) the previous month, industry data showed.The pace of the slowdown lagged the 28% fall in the country’s base oils exports in June from the previous month.The smaller fall in base oils output in June coincided with firm base oils prices relative to feedstock and competing fuel prices throughout the second quarter of the year.The firm margins incentivized Asia-Pacific refiners to maintain or raise base oils output.The large fall in South Korea's base oils exports in June coincided weak demand and an unattractive arbitrage to key markets like China, India and Middle East.The slump in exports and smaller drop in output triggered a rise in the surplus of base oils output over exports in June to the highest volume in seven months.The rise in surplus supplies could reflect moves to build stocks ahead of plant maintenance in South Korea scheduled to start at the end of the third quarter.The size of the surplus of output over exports was still unusually large and raised the prospect of moves to cut that surplus through a rise in shipments to overseas markets.Any such moves during the third quarter coincided with a seasonal slowdown in demand throughout most of the region.The narrow gap between FOB NE Asia Group II base oils prices and CFR India prices reflected the still-muted buying interest in that market.The combination of weak regional demand, a rise in surplus supply and firm margins boosted the incentive for refiners to adjust prices to levels that at least boosted arbitrage opportunities to more distant markets..S Korea’s June base oils exports fall
South Korea’s base oils output edged down in June, contrasting with a much steeper slide in the country’s base oils exports that month.Total output of 2.63 million barrels (371,000 tonnes) in June fell by 4% from 2.75 million barrels (387,000 tonnes) the previous month, industry data showed.The pace of the slowdown lagged the 28% fall in the country’s base oils exports in June from the previous month.The smaller fall in base oils output in June coincided with firm base oils prices relative to feedstock and competing fuel prices throughout the second quarter of the year.The firm margins incentivized Asia-Pacific refiners to maintain or raise base oils output.The large fall in South Korea's base oils exports in June coincided weak demand and an unattractive arbitrage to key markets like China, India and Middle East.The slump in exports and smaller drop in output triggered a rise in the surplus of base oils output over exports in June to the highest volume in seven months.The rise in surplus supplies could reflect moves to build stocks ahead of plant maintenance in South Korea scheduled to start at the end of the third quarter.The size of the surplus of output over exports was still unusually large and raised the prospect of moves to cut that surplus through a rise in shipments to overseas markets.Any such moves during the third quarter coincided with a seasonal slowdown in demand throughout most of the region.The narrow gap between FOB NE Asia Group II base oils prices and CFR India prices reflected the still-muted buying interest in that market.The combination of weak regional demand, a rise in surplus supply and firm margins boosted the incentive for refiners to adjust prices to levels that at least boosted arbitrage opportunities to more distant markets..S Korea’s June base oils exports fall