Global Base Oil Production Capacity Increases Rapidly

Recently, the Global Base Oil Refining Guide 2019 shows that the Asia-Pacific region currently accounts for nearly half of the global base oil production after China's base oil production capacity has increased substantially in the past year. At present, global base oil production capacity has risen to 1.2 million barrels per day, an increase of 7.3% from 1.1 million barrels per day in 2018. The Asia-Pacific region currently accounts for nearly 49% of the world's base oil supply, and some base oil expansion projects in the region are nearing completion. Earlier this month, ExxonMobil announced that its API II base oil plant upgrading project on Yayichawan Island, Singapore, had been completed. The company did not disclose the size of the project, but industry estimates that the project will increase capacity by about 6,000 barrels per day. In Northeast Asia, companies in South Korea and China have expanded their base oil capacity substantially in the past 12 months. Hyundai Shell Base Oil Company of Korea has expanded the capacity of Class II Base Oil Unit in Dacheng, Korea by 12,000 barrels per day. Chinese enterprises have mainly expanded the production capacity of Class II and III base oils. China currently has the largest base oil production capacity in the Asia-Pacific region, with daily output exceeding 225,000 barrels, accounting for almost 21% of global base oil production. South Korea is the second largest base oil producer in Asia, with a capacity of about 132,800 barrels per day, accounting for 12% of global production. Japan, South Asia, Australia and other Pacific countries together account for more than 15% of world capacity. Driven by several expansion projects and new facilities in the past 12 months, the production capacity of Class II and III base oils accounts for about 64% of China's total base oil production capacity. Class I base oil now accounts for less than 20% of China's total base oil production, compared with 64% in 2008. The production capacity of naphthenic base oil has remained unchanged in the past year, still at 37.5 million tons per year, accounting for about 16% of China's total base oil production.