The Chinese Base Oil market continued its decline during August xxxx followed by July, despite the adverse weather conditions that disrupted industrial activities and transportation. While the monsoon season and Typhoon Gaemi posed significant challenges, several counterbalancing factors mitigated their impact on demand by proactive inventory management. The oversupply situation, driven by reduced production rates and steady consumption, coupled with expanding domestic production and lower freight rates, has put downward pressure on prices.
During August xxxx, several Base Oil buyers proactively built-up inventory in Asia by anticipating the potential disruptions caused by the monsoon season to ensure sufficient supplies were available during their operations. Additionally, the slowing demand and reduced production rates at many Base Oil plants led to an oversupply situation in certain market segments. This imbalance was further aggravated by steady consumption levels, indicating that demand was not keeping pace with production....
