Output falls to five-month low, boosting reliance on imports to meet domestic demandQ4 output falls to lowest since 2023, reversing two-year surge in productionPick-up in imports could be temporary if buyers revert to relying on domestic supply.Argentina’s base oils output extended its fall in December, dipping to a five-month low, cutting the country’s surplus availability for export and instead increasing its reliance on imports to meet demand.Total output fell to less than 5,000 cubic meters (4,200 tonnes) in November, down from more than 7,400 cubic meters in October, Ministry of Economy data showed.A year-on-year contraction for a third straight month reversed a two-year surge in output that covered a growing share of domestic supply and cut requirements for imports..Key Highlights· Output slowed month-on-month for a second month, following November production issues at the country’s largest Group I base oils unit..Argentina’s November Base Oils Supply Lags Demand For Second Month.· Fourth-quarter base oils output fell to 20,600 cubic meters, down from more than 31,000 cubic meters in the third quarter and the lowest since late-2023..· Total supply, or output and imports combined, came to 12,200 cubic meters in December, falling by 46% year on year and for a third straight month.· Imports made up 61% of the December supply, the highest share in eighteen months and up from 34% for the full year.· Shipments from the US accounted for 98% of December imports, up from 81% for all of 2025 and 68% in 2024..Market RepercussionsThe pick-up in imports pointed to rising demand to cover lower domestic output.A recovery in domestic production could in turn trigger a reversion to the previous trend, when domestic supplies covered most demand. Argentina’s recent base oils production issues highlighted the risk of a heavy reliance on a single major source for supply.Even so, plentiful surplus volumes in the US and other overseas markets provided ready alternatives for buyers..US November Base Oil Exports to Mexico Fall to Near-Three-Year Low.The availability of those shipments, combined with weak domestic lube demand, could incentivize buyers to continue to rely more on domestic supplies.Such a scenario would curb a more sustained pick-up in US shipments to the country.
