The Netherlands' base oil and lube output rebounded in July to its highest in more than seven years. But the country's stocks extended their fall to a four-month low as exports surged.
Base oil and lube output of 81,000t in July rose from a four-month low of 48,000t the previous month. The volume was the highest since the start-up of a new Group II base oil unit in the country in early 2019. The highest monthly output has been 71,000t since then.
The rise in output coincided with a revival in base oil and lube demand throughout the region during the summer months. Tight supply of Group I base oils added to the attraction of using Group II base oils instead.
Base oil exports already began to rise in June amid a pick-up in shipments to several European markets.
Exports climbed back to 98,200t in June, after falling in May to their lowest since 2017. Even the June volume was the second lowest in 17 months.
While total exports remained low, shipments of 29,930t to Belgium in June were the highest since 2016.
By contrast, exports of 570t to Spain were the lowest in more than two years. Exports to the Mediterranean country had averaged more than 14,000 t/month over the past year. A large portion of Spain's base oil imports are re-exported to other markets like north Africa.
The Netherlands' base oil imports also recovered in June, climbing to a three-month high of 98,760t.
Spain is typically the source of a large share of those supplies amid regular flows of Group III base oils to the Netherlands. But imports of just 10,250t from Spain in June remained much lower than typical volumes of close to 30,000 t/month.
The drop in Group III supplies from Spain added to the tightening availability of the premium-grade product in Europe just as demand revived. Group III prices rebounded throughout the third quarter in response to the tighter supply-demand fundamentals.
By contrast, the Netherlands' imports from Belgium more than tripled in June from the previous month to a six-year high of 35,610t.
