Argentina’s base oils imports fell to a five-month low in December amid a halt in arbitrage shipments from markets like South Korea.
A rebound in the country’s base oils output to a seven-month high covered for some of the drop in imports.
Total supply still fell to a five-month low and outpaced the slowdown in domestic lube consumption.
The halt in arbitrage flows mirrored a similar trend throughout Latin America during the final months of last year.
It also raised the prospect of domestic base oils production staying at higher levels or imports from the US rising over the coming months.
Argentina’s base oils imports of 4,940mᶟ (4,380t) in December fell from average shipments of more than 20,000 mᶟ/month in the four months to November.
The surge in shipments in the second half of the year boosted the country’s total imports to 142,990mᶟ in 2022. The volume rose from 78,870mᶟ in 2021 to the highest in more than eight years.
Argentina’s imports typically consist of shipments from the US, as well as from markets like Qatar and Malaysia for Group III and Group III+ supplies.
Last year’s shipments included Group I supplies from Europe and the Mideast Gulf and Group II cargoes from northeast Asia.
The surge in arbitrage shipments covered more of Argentina’s requirements, prompting a drop in domestic base oils output.
Base oils production of 65,560mᶟ in 2022 fell from 105,230mᶟ the previous year to the lowest in more than eight years.
The dynamic changed in December as imports reverted to more regular suppliers like US and Qatar.
The country’s base oils production duly rebounded in December to more than 10,600mᶟ. The volume was the highest since May.
Total base oils supply, or output plus imports, still fell in December to a five-month low of 15,620mᶟ.
The drop in supplies from more than 27,000mᶟ in November far exceeded the size of the fall in lube consumption during the same two-month period.