Brazil’s base oils supply lagged demand in August for the first time in three months as imports and domestic output fell to a six-month low.The country’s base oils exports rose to the highest in almost four years, adding to the squeeze on domestic supply.The rise in exports also pointed to a preference to reverse a gradual rise in surplus supply in recent months and to keep stocks balanced-to-low.The strategy aligned with more muted domestic demand this year and expectations of a rise in surplus base oils supplies in overseas markets in the coming months.Brazil’s base oils supply fell back to 95,600 cubic meters (85,000 tonnes) in August, government data showed.The volume fell from close to 150,000 cubic meters the previous month to the lowest since February..The sharp contraction reflected a fall in domestic output amid a dip in production from Petrobras’ Group I unit at its Reduc refinery to a six-month low.The slowdown coincided with a drop in Brazil’s base oils imports amid a slowdown in shipments from the US and from the Middle East..The fall in shipments from the US followed an unusually strong pick-up in domestic demand in that market in July, curbing volumes available for export.The fall in shipments from the Middle East followed a round of maintenance-work on two of the region’s Group III base oils units during the second quarter of the year.The shipment of a large cargo of naphthenic base oils from Brazil to India in August then removed additional volumes from the domestic market.The shipment, combined with steady domestic lube consumption, lifted Brazil’s total demand to more than 145,000 cubic meters in August.The volume was the highest in more than a year and outpaced Brazil’s base oils supply by the largest amount in more than four years.The shortfall balanced out a rise in surplus volumes during three of the previous four months.More balanced stocks then left the country well-positioned to take advantage of an expected pick-up in surplus supply in overseas markets over the coming months..Argentina August base oils supply rises.Latin America’s July lube demand rises.Brazil’s July base oils supply exceeds demand .Base Oil News stories and analysis also available on ICIS platform
