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Brazil's base oils imports climbed to their second-highest level in 21 months as buyers prepared for June plant maintenance shutdown
The build-up followed a recent surge in US exports to Brazil, showing planned outages remain manageable despite tighter global supply
Brazil's growing dependence on US supply left the market increasingly exposed as the Atlantic hurricane season gathers pace
Brazil's base oils imports surged in June to their second-highest level in almost two years, as buyers built stocks ahead of scheduled maintenance at the country's largest Group I plant.
Imports climbed to more than 80,000 tonnes in June, rising 30% from a year earlier , ANP data showed. Volumes topped 80,000 tonnes for the second time in three months, after last exceeding that level in September 2024.
The increase lifted second-quarter imports to more than 226,000 tonnes, the highest since the fourth quarter of 2023, when the base oils plant last underwent major scheduled maintenance.
The higher shipments this time coincided with almost three-weeks’ scheduled maintenance work on the base oils unit at Petrobras’ REDUC refinery in June.
The maintenance followed several months of below-normal production and an unexpected surge in consumption that left supply struggling to keep pace with demand.
The stronger import programme in the second quarter and Brazil’s improving supply balance since April showed the advantage of planned maintenance over unexpected disruptions to supply or demand.
Key Highlights
· US shipments continued dominating Brazil's imports, accounting for around three-quarters of total volumes during the quarter.
· US shipments to Brazil showed signs of easing in June from May, before rising again in July.
· Imports from Asia remained subdued despite that region’s lower prices.
Market Repercussions
The plant shutdown was flagged well in advance. US exports to Brazil then surged in May to their highest level in more than a decade, with most of those shipments arriving in June.
Brazil's import requirements are likely to ease following the completion of maintenance, allowing more US supply to remain available for other destinations.
Even so, the recent surge in shipments extended a reliance on the US that already covered the bulk of Brazil’s import needs.
That concentration is Brazil's main vulnerability. Any disruption to US supply, or tighter availability in that market, would leave Brazil more exposed than importers with more diversified sources of supply.
The risk is more acute now, with the Atlantic hurricane season under way.
