Latin America Sept lube demand falls

Latin America’s lube demand fell in September for a second month as an ongoing slide in consumption in markets like Mexico and Argentina outweighed slowing demand growth in Brazil.

Latin America’s base oils supply fell even more sharply, leaving the region with a sustained and growing shortfall.

The tighter supply dynamics could help to balance out a seasonal slowdown in lube consumption during the fourth quarter of the year.

A smaller build-up of surplus supplies in the fourth quarter could then trigger a faster recovery in demand for additional base oils supplies in the first quarter of next year.

Latin America’s lube consumption of less than 185,000 tonnes in September fell from close to 200,000 tonnes in August to a nine-month low.

Consumption fell by 2% and for a second month from year-earlier levels.

The pace of the contraction eased from a 6% fall in August amid a slowdown in the drop in Mexico’s consumption and signs of firmer demand in Chile.

The region’s base oils output and US exports to Latin America fell more sharply than demand.

Regional output and US exports combined came to around 160,000 tonnes in September.

The volume fell from more than 193,000 tonnes in August and by 19% from year-earlier levels to a twenty-one month low.

Supply fell from year-earlier levels even with higher base oils output in Brazil compared with year-earlier levels.

The shortfall of regional supply to lube demand duly widened to an eleven-month high of more than 20,000 tonnes.

The tighter supply could support steadier demand for additional volumes from regional refiners and from the US at a time of year when lube consumption typically slows.