Argentina’s base oils supply recovered to more typical levels in November on the back of a rebound in domestic output.The country could need to rely even more on domestic output over the coming months to counter signs of lower imports.Base oils supply of close to 19,000mᶟ (16,800t) in November rose from a twenty-month low of less than 8,000mᶟ in October, government data showed.Supply rose because of a recovery in domestic base oils output to 10,700mᶟ, following a pause in production in October.The rise in production lifted total output to more than 37,000mᶟ in the five months to November, up from around 11,000mᶟ during the same period a year earlier.Higher domestic output in second-half 2023 partially countered the impact of a fall in base oils imports amid a slump in arbitrage shipments from the Mideast Gulf and Asia.A sustained slowdown in Argentina’s lube consumption curbed the country’s base oils requirements, cushioning further the impact of lower imports.Supplies from the US rose in the second half of the year even as Argentina’s total imports fell.The contrasting dynamics reflected healthy availability and competitive prices for US supplies compared with other regions.The trend suggested that demand for base oils supplies from the US could continue to hold steadier as the drop in arbitrage shipments balances out the impact of lower domestic consumption.Argentina’s supply-demand fundamentals also faced the challenge of surging costs following the sharp depreciation of the country’s currency versus the US dollar.The weaker currency and higher cost of overseas supplies raised the prospect of a further drop in base oils imports and a growing incentive to cover more requirements with domestic supplies..Argentina’s Nov lube demand falls.Base Oil News stories and analysis also available on ICIS platform
