Brazil’s October Base Oils Supply Lags Demand
Supply lags demand for third month, keeping blenders' stocks tight
Lower supply in 2H 2025 contrasts with firmer demand
Tighter stocks should support ongoing demand for additional volumes from overseas markets
Brazil’s base oils supply lagged demand for a third month in October, keeping blenders’ inventories tight and sustaining their need to secure regular replenishment volumes.
Total supply, combining output and imports, fell to 121,000 cubic meters (107,000 tonnes), down from almost 135,000 cubic meters in September, government data showed.
Demand held firm around 140,000 cubic meters for a fourth month, widening the shortfall to more than 20,000 cubic meters.
Blenders’ balanced-to-tight stocks earlier in the year helped them to mitigate the impact of weaker demand during that period.
The extension of this strategy into the second half of 2025 coincided with a recovery in demand and lower supply amid unexpected refinery production issues and more volatile import volumes.
The ensuing squeeze on blenders’ stocks raised the prospect of sustaining firm demand for additional base oils supplies in the coming months.
Lower stock levels also left blenders well positioned to benefit from any price adjustments aimed at accelerating the removal of surplus supplies from overseas markets such as the US during the winter period.
For overseas suppliers, Brazil’s current supply-demand dynamics offer a valuable outlet for surplus volumes.
A pick-up in US shipments to Brazil in October and November underscored moves to tap that opportunity.
