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Brazil’s lubricants demand remained elevated in April for a second straight month, following March’s multi-year peak
Sustained demand strength limited any significant easing in supply conditions despite higher import inflows
A tight supply balance sustained the need for additional overseas shipments, underscoring Brazil's exposure to global base oils disruptions
Brazil’s lubricants demand stayed elevated for a second straight month in April, extending March’s surge as concerns over supply security and prices kept procurement firm in a market heavily reliant on imports.
Demand held at more than 130,000 cubic metres (119,000 tonnes) in April, easing from March’s multi-year high of more than 150,000 cubic metres but still up 11% year on year and the second highest in six months, ANP data showed.
Brazil relied on imports for more than 60% of its base oils requirements over the past year, leaving the domestic market exposed to fluctuations in global supply and prices since end-February.
Supply disruptions incentivized buyers to bring forward procurement in March, with April’s elevated demand pointing to that concern persisting rather than unwinding.
Key Highlights
· Lower month-on-month demand contrasted with stronger base oils imports, narrowing the gap between consumption and imports to a four-month low.
· Base oils imports amounted to more than 80% of domestic lubricants consumption in April, rising from 56% in March to the highest share this year.
Market Repercussions
The surge in April imports helped offset the impact of any ongoing constraints in domestic output and raised the prospect of supply outpacing demand for the first time in four months.
But sustained demand strength limited the extent of any resulting supply-build.
Tight supply conditions pointed to continued requirements for additional overseas shipments, mostly from the US.
Distributors and blenders in that market typically begin building stocks in the weeks ahead of the Atlantic hurricane season, which officially starts in June — adding to competition for supply and tightening availability further.
