China remains biggest destination for Singapore base oils exports

07 December 2009 09:06  [Source: ICIS news]

SINGAPORE (ICIS news)--Singapore shipped nearly 787,000 tonnes of base oils to China during the first 10 months of 2009, almost half of its total base oils exports, amid strong demand growth in Asia’s biggest market, sources said on Monday.

The next two top destinations for base oils from Singapore were Australia and India with exports of around 118,600 tonnes and 116,400 tonnes respectively, according to latest official trade statistics.

The total base oils exported by Singapore in the first ten months of 2009 stood at 1.6m tonnes.

Singapore is one the key centres for base oils production in Asia, with both group I and II production facilities run by ExxonMobil and Shell. The total group I capacity in Singapore is close to 1m tonnes/year while for group II base oils is around 930,000 tonnes/year.

“The free trade agreement (FTA) between China and Singapore means Singapore base oils are exempt from import tax of around 6% in China and therefore are preferred by some large blenders,” a China based base oils trader said.

“Both Shell and ExxonMobil also have their own blending operations in China to make finished lubricants and a large part of these exports go for captive use”, said another regional base oils user.

The total base oil imports by China in the first 10 months of 2009 stood at 1.56m tonnes of which Singapore was the biggest supplier, followed by Korea.

Base oils are used for making automotive and industrial lubricants, transformer oils and white oils for personal care applications.

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By: Anu Agarwal
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