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Supply falls to four-month low on dip in output and imports
Demand outpaces supply even as lube consumption slips and exports fall
Domestic output continues to account for larger-than-usual share of supply at expense of imports
Argentina’s base oils supply lagged demand for a second month in November as output fell and imports almost stalled.
The shortfall tightened market fundamentals and raised the prospect of increased requirements from overseas suppliers.
Total base oils supply, or output and imports combined, fell to just 8,000 cubic meters (7,100 tonnes) in November, Ministry of Economy data showed.
The volume fell from almost 17,000 cubic meters in October and for the fifth time in six months from year-earlier levels to a four-month low.
Total demand, or domestic consumption and base oils exports combined, fell to 19,200 cubic meters, down from more than 33,000 cubic meters in October. But it still outpaced supply.
Key Highlights
· Base oils output slipped to a four-month low of 7,400 cubic meters in November, following production issues at the country’s largest Group I base oils unit.
· Imports fell sharply, to less than 600 cubic meters, from more than 8,000 cubic meters in each of the previous three months, amplifying the supply shortfall.
· Domestic output accounted for more than 90% of total supply in November and more than 67% during January-November, up from less than 60% in 2024 and below 45% in 2023.
· Exports almost paused in November, as overseas shipments bore the brunt of lower supply.
· Lube demand fell for the third time in four months, reflecting continued volatility in domestic consumption.
Market Repercussions
Weak lube consumption in 2024-2025 enabled Argentina to meet a larger share of its base oils needs from domestic refineries.
Expectations of firm economic growth in 2026 could trigger a more sustained pick-up in lube demand.
Any such trend would boost blenders’ need to hold larger stocks.
It could also increase Argentina’s demand for larger import volumes and cut the availability of domestic supplies for export.
Any sustained slowdown in Argentina’s base oils output would add to those requirements for overseas supplies.
Steady lube demand in 2026 would by contrast allow domestic output to continue to cover a larger share of requirements, curbing the need for additional imports.
