Argentina’s base oils output rose to a three-month high in July as domestic supply continued to cover more of the country’s requirements at the expense of imports.Base oils output came to 12,400 cubic meters (11,000 tonnes) in July and to 65,400 cubic meters in the first seven months of the year.The output volume so far this year was similar to year-earlier levels even as the country’s lube demand slumped.Supply instead adjusted lower through a sustained drop in base oils imports. Imports fell to less than 3,000 cubic meters in July and to around 45,500 cubic meters in the first seven months of the year.The US was the source for more than 75% of the shipments.The total import volume was down 25% from more than 60,000 cubic meters during the same seven-month period last year.Steady domestic output and the drop in imports increased blenders’ reliance on domestic base oils supplies and on using more Group I base oils to produce their lubricants.Argentina relies on overseas supplies for its Group II and Group III base oils requirements.Steady base oils output and lower imports also cut Argentina’s exposure to any overseas supply disruptions.US base oils availability tightened in recent months as buyers built extra stocks to cover for any weather-related disruptions during the Atlantic hurricane season.Argentina’s base oils stocks still rose in July even as supply lagged the country’s lube production and sales volumes.Rising base oils stocks suggested blenders were covering more demand with lube stocks rather than with production.The moves highlighted blenders’ focus on cutting their finished lube inventories.The moves also compounded the drop in base oils demand.Rising base oils stocks raised the prospect of delaying for longer any recovery in base oils demand and any larger pick-up in requirements from overseas markets..Argentina’s July lube demand falls.US’ June base oils exports to Brazil rise
