Output recovers to three-month high
Supply still tightens as lower imports counter stronger output
November production issues and tight inventories could boost demand for imports
Brazil’s base oils output rose to a three-month high in October, signalling that refiners briefly got to grips with production issues that disrupted output in August and September.
Fresh, unexpected problems in November – particularly affecting Group I brightstock – now threaten to push output back towards those recent lows.
Total October production of 56,000 cubic meters (49,500 tonnes) rose from 46,000 cubic meters in both August and September, government data showed.
Those two months marked the lowest output levels in five months, indicating that production issues likely began earlier in the third quarter.
Even with the October rebound, stronger domestic production failed to offset a steep drop in Brazil’s base oils imports, tightening overall supply.
The imbalance underscored the country’s structural reliance on imported base oils — with fluctuations in import volumes often exerting a greater impact on supply than shifts in domestic production.
Any drop in output in November is likely to coincide with a pick-up in imports that should help stabilise supply.
Even so, any extended slowdown in output, combined with balanced-to-tight domestic inventories, could support firmer demand for overseas shipments.
Such a trend would provide a welcome boost for suppliers like the US, where the market faces a growing surplus amid a seasonal slowdown in consumption.
