Brazil’s base oils supply rose to a ten-month high in July as a surge in domestic output added to already-high base oils imports.Total supply, or domestic output and imports combined, climbed to more than 145,000 cubic meters (131,000 tonnes) in July, government data showed..The volume rose by 5% and for a fourth month from year-earlier levels to the highest since last September.The rise in supply outpaced Brazil’s demand for the third time in four months, triggering a steady pick-up in inventories.The relatively small size of the monthly supply-surplus pointed to limited pressure for now from the rise in stocks. It also highlighted Brazil’s persistently large requirements to cover domestic demand.Even so, tepid domestic demand boosted the preference for buyers to maintain more balanced inventories.The recent fall in US base oils export prices in response to rising surplus supply added to the attraction of keeping stocks at balance-to-lower levels.The country’s buyers would then be better positioned to take advantage of any extension of the fall in US prices and rise in surplus supply.The US is the largest overseas source of Brazil’s base oils imports..Those moves to manage inventories carefully raised the prospect of a short-term slowdown in demand.Any such slowdown in requirements would likely impact supplies from overseas sources first in view of the competitive prices and attraction of procuring smaller volumes from domestic sources.The slump in US base oils exports to Brazil at the end of the second quarter of the year could have reflected such a slowdown in demand for supplies that were set to arrive during the third quarter.The surge in Brazil’s base oils output in July could have similarly reflected moves to tap firmer demand for supplies from domestic sources instead.The country’s base oils output rose to 65,500 cubic meters in July.The volume climbed from already-firm levels of around 55,000 cubic meters/month during the previous four months to the highest in almost a decade..Brazil’s July lube demand holds steadier.Argentina’s July base oils supply falls.Base Oil News stories and analysis also available on ICIS platform
