Argentina’s base oils supply lagged demand in November for the fourth time in five months amid a dip in domestic output and an ongoing slide in imports.Demand got support in November from an extended jump in exports and a smaller drop in in lube consumption.The persistent supply shortfall raised the prospect of a sharper rise in base oils demand when lube consumption revives.Any such recovery would likely include a stronger pick-up in requirements for base oils supplies from overseas markets.Argentina’s base oils supply, or output and imports combined, fell back to 12,700 cubic meters (11,300 tonnes) in November, from close to 21,000 cubic meters the previous month, government data showed.Supply fell mostly because of a dip in domestic base oils output.Imports of 5,200 cubic meters in November were similar to the previous month. But they extended their fall from year-earlier levels for the sixth time in seven months.The slowdown cut imports’ share of Argentina’s base oils supply to around 40% of the total in November and in the first eleven months of the year.The share was down from 55% of total supply in 2023.Imports’ share of total supply fell last year as the country increased its reliance on domestic production to cover more of its requirements at a time when lube demand faced a sustained slump.Falling lube demand boosted the attraction for blenders and distributors to hold and procure smaller volumes for more prompt delivery.The dynamic cut the attraction of lining up larger volumes from overseas markets with a long time period between procurement and delivery of the supplies.Any recovery in demand could reverse that trend.Any such recovery has so far yet to materialize, with Argentina’s lube consumption falling in November for the sixteenth time in seventeen months.But the 5% fall in demand in November was the smallest contraction in thirteen months.Argentina’s base oils exports also stayed unusually high in November for a second month, adding to total demand.The removal of larger base oils volumes through the export market further tightened supply, increasing the impact of any subsequent recovery in lube consumption..Argentina’s October lube demand falls.Brazil’s Nov base oils supply exceeds demand.Base Oil News stories and analyses also available on the ICIS platform
