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Brazil’s imports fall, easing supply-build at the end of last year
Drop in US shipments contrasts with jump in supplies from South Korea
Rising Asia base oils capacity could increase frequency of flows to the Americas
Brazil’s base oils imports fell to a three-month low in January, helping to stabilize the country’s inventories after a late-2025 build-up of surplus volumes driven by a surge in inflows.
Total imports fell to 56,800 tonnes in January, easing from more than 67,000 tonnes in December and more than 73,000 tonnes in November, MDIC data showed.
The pullback, especially from the US, followed a period of elevated buying that left supply outpacing demand at the end of last year.
Any extension of the slowdown in shipments from the US could add to pressure on suppliers in that market as they seek alternative outlets amid a prolonged slump in exports to Mexico since mid-2025.
Key Highlights
· Total imports remained relatively firm in January, after November volumes reached a 27-month high while December shipments were the second-highest in thirteen months.
· Imports from the US fell to 38,000 tonnes in January, down from more than 53,000 tonnes in both November and December.
· Imports from South Korea rose to more than 9,500 tonnes, the highest monthly volume in a year and well above typical monthly levels of less than 4,000 tonnes in 2025.
Market Repercussions
Imports from South Korea rose despite a closed arbitrage to move Group II base oils from Asia to the Americas.
The shipments could reflect greater flexibility over price levels and followed a surge in South Korea’s base oils output during the second half of last year.
Any extension of the trend could provide Brazilian buyers with alternative supply sources in place of US shipments, compounding the impact of weak domestic demand and reduced flows to Mexico.
Signs of a pick-up in US exports to Brazil in January suggested that the South Korea shipments likely reflected year-end surplus volumes.
Even if they prove to be an outlier, the shipments could become more frequent as new production capacity in Asia boosts supply and intensifies the need to secure outlets for the cargoes.
