Base oil exports from South Korea are down 6% year-on-year, according to Korea National Oil Corp. Dwindling Chinese demand and tariffs in the United States could contribute to longer-term shrinkage while turnarounds and price may have an immediate effect.
Exports in February were 258,526 metric tons, up 29% over January, but year-on-year they were down 6% from 275,443 tons. So far this year, 458,526 tons has left the country, down 20% from the 572,578 tons exported in the first two months of 2024. Last year, total exports amounted to 3,296,180 tons, a decline of 1.81% from 2023, according to data published by Platts.
Chinese demand for imported base oils fell by 13% last year, as the country relies more on domestic capacity and the transition to battery electric vehicles accelerates.
For more on base oil prices in Asia, see our Weekly Asia Base Oil Price Reports.
South Korean refiner GS Caltex is currently undergoing a 45-day turnaround at its Yeosu API Group II/Group III plant. Hyundai Oilbank Shell Base Oil had reduced operating rates earlier this year due to an outage, which limited feedstock supply.
SK Enmove’s Group II+ is U.S.$1,908 per metric ton, whereas Motiva’s is almost $200 cheaper. U.S. buyers would find it difficult to pass up that difference in price.
“Exports down could be the planned maintenance and their U.S. tanks might be full, plus SK has plants in Spain and Indonesia, but for sure customers are baulking at price difference,” Jan Trocki, an industry consultant, told Lube Report. “Margin aspirations that are out of sync with the market, causing customer defections.