Argentina’s base oils exports rose to a multi-year high in June amid a growing focus on tapping strong overseas demand for Group I base oils.The surge in exports, and correspondingly firm domestic base oils output, contrasted with Argentina’s shrinking lube demand and sliding base oils imports.The dynamic highlighted the sustained global demand for Group I base oils, tight availability of the product and the subsequent opportunity those fundamentals generated for suppliers like Argentina.The focus on overseas markets also insulated Argentina’s base oils supplies from the weakness of its domestic market.The country’s base oils exports rose to more than 17,000 cubic meters (15,100 tonnes) in June and more than 29,000 cubic meters in the second quarter of the year, government data showed..The monthly and quarterly volumes were the highest in at least a decade and followed a sharp rise in overseas shipments during the previous two quarters.The pick-up in exports contrasted with a dearth of such shipments during the two years to last October.The June exports indicated Brazil and the US as the destination for the supplies, although one shipment was seen moving instead to West Africa.Both Brazil and Nigeria had previously been the key outlets for the recent surge in shipments from Argentina.The rise in flows to Nigeria coincided with a drop in spot shipments from Europe and Russia to that market.The rise in shipments to Brazil provided buyers in that market with supplies with a shorter shipment time than cargoes from the US.Brazil’s weakening lube demand boosted the attraction for blenders to maintain lower stocks and to procure smaller volumes for more prompt delivery.The shorter shipment time for cargoes from Argentina to Brazil tapped that dynamic.Argentina’s surging exports incentivized the country to maintain higher base oils output, with a focus on meeting strong overseas demand and sidestepping its weak domestic consumption.Base oils output of more than 37,000 cubic meters in the second quarter of the year was the highest quarterly volume in more than five years, reflecting that dynamic..Argentina’s June lube demand falls.Brazil’s June lube demand extends fall.Global base oils exports to Africa fall in May.Base Oil News stories and analyses also available on the ICIS platform
