February 14, 2017
Volume 7 Issue 8
Japan’s Base Oil Exports Surged in 2016
Japan’s base oil exports surged 21.5 percent last year as production and imports increased and domestic demand continued to shrink, according to figures released at the end of last month by the Ministry of Economy, Trade and Industry.
Nearly one million tons of base oils were exported from Japan last year. The significant increase over 2015’s volume was likely driven by several factors: base oil production from the nation’s eight refiners increased by 5.7 percent to 2.2 million metric tons; imports increased nearly 14 percent, to 142,000 tons; and in-country consumption shrank nearly 4 percent, down to around 1.2 million tons.
Oversupply of certain grades within the country also led to the trade imbalance, according to Adachi Yukihiko, managing director of the Tokyo office of United States-based consultancy Kline & Co. “API Group I base stocks are in surplus, while Group II and Group III base stocks are in deficit,” Adachi said last year. Group I makes up nearly 88 percent of the country’s paraffinic production capacity, according to Lubes’n’Greases’ “Global Guide to Base Oil Refining.”
As synthetic finished lubricant applications grow, Group II and Group III will dominate Japan’s market and overtake its consumption of Group I, reaching a 53 percent share of the market by 2024, he forecasted.
Japan’s sales volumes of synthetic industrial lubricants have recorded new highs each year for the past three years, and sales of high-tier passenger car motor oils – such as ExxonMobil’s Mobil 1 – have been increasing for at least 5 years, TonenGeneral Sekiyu KK President Jun Mutoh said in an annual presentation last month.
In April, JX Holdings will merge with TonenGeneral Sekiyu KK to consolidate and improve operational efficiency in Japan’s shrinking lubricant market while expanding overseas. TonenGeneral will also launch a new lubes marketing subsidiary in April, having absorbed its EMG Marketing Godo Kaisha unit late last year.