Argentina’s lube demand fell in July against the backdrop of mixed signals about the country’s economic outlook, incentivizing blenders to maintain low stocks.Besides lower lube demand, the signals included a recent spike in the country’s short-term interest rates and the ongoing deprecation of its currency.Moves by blenders to maintain low stocks of lubricants and feedstock supplies would curb their exposure to those kinds of risks and to any further slowdown in lube consumption.Moves to maintain lower stocks would in turn boost the attraction of procuring small volumes of base oils supplies more frequently. It would also curb interest in seeking larger shipments from overseas markets.Slack domestic lube demand and the deprecation of Argentina’s currency could simultaneously sustain interest in targeting export markets with more shipments of Group I base oils.The country’s lube consumption of 18,600 cubic meters (16,400 tonnes) in July fell by 1% and for a fourth month from year-earlier levels, government data showed..Demand fell as a 15% slide in consumption of industrial oils outweighed a 5% rise in consumption of automobile lubricants.Weak lube demand added to signs of the country’s more mixed economic growth signals.Argentina’s automobile sales extended their rise in July for a thirteenth month, while automobile production fell at its steepest pace in eleven months.Inflation rose month-on-month in July for a second month, while the local currency depreciated by 7% versus the US dollar to a record-low. It extended its decline this month..More muted domestic lube demand and the country’s weaker currency extended the incentive to maximise the country’s base oils exports.Argentina’s base oils shipments instead almost ground to a halt in July after surging to multi-year highs in the first six months of the year.The pause in shipments coincided with a seasonal slowdown in demand everywhere from the US to West Africa and Europe.Even so, elevated prices for products like Group I brightstock sustained the attraction of lining up more arbitrage shipments to move to overseas markets..Brazil’s July lube demand holds steadier.Latin America’s June lube demand falls.US June base oil exports to S America fall.Base Oil News stories and analysis also available on ICIS platform
