Argentina’s lube demand fell in July for a ninth month and at its fastest pace in three months, suggesting any recovery in consumption is unlikely to materialize any time soon.The country’s blenders continued to cut their lube production more sharply than the drop in consumption amid signs their priority was to minimize inventories.The moves suggested that blenders also anticipated a further drop in demand over the coming months.Argentina's total lube consumption of 18,500 cubic meters (16,400 tonnes) in July fell from 19,500 cubic meters in June and by 11% from year-earlier levels, government data showed.The size of the drop in demand reversed a slowdown in the pace of the contraction to less than 10% in May and June.The slower drop in demand during those two months had improved from a 20% fall in consumption in the first four months of the year.The sharper slowdown in July still lagged the 14% fall in Argentina’s lube production in July.The last time lube output fell more slowly than consumption was in April.The faster drop in output than in demand throughout most of the year slashed the country’s lube stocks to their lowest level in more than two years.The drop in production and stocks curbed blenders’ exposure to a further fall in demand and to the costs of high inflation and interest rates.The move left blenders exposed to the risk of a sudden improvement in lube demand in the coming months.The move also suggested that blenders were more comfortable with that risk.It also suggested that they were confident that other market signals would flag the prospect of any such improvement in lube demand well in advance.Some of those signals were turning more mixed.Argentina’s monthly economic activity indicator fell in June at its fastest pace in three months.But the country’s automobile sales rose in July for the first time in five months. Auto production fell in July for an eighth month. But the pace of the contraction was the slowest this year.The ongoing slide in Argentina’s lube consumption also cut its base oils requirements.A repercussion of the drop in base oils requirements was to leave it less exposed to the risk of any weather-related disruptions to shipments from the US during the third quarter of the year..Brazil’s July lube demand extends rise.US’ June base oils exports to Brazil rise
