Latin America’s lube demand fell in August for the first time in three months amid sliding consumption in markets like Mexico and Argentina and waning demand growth in Brazil.Slower demand contrasted with a rise in the region’s supply for the first time in seven months.The shortfall of supply to demand narrowed in response.Lube consumption of around 205,000 tonnes in August fell from more than 208,000 tonnes in July and by 4% from year-earlier levels, government and industry data showed.Strong lube demand growth in Brazil balanced out the impact of a sustained fall in consumption in Mexico and Argentina for most of the past year.Demand in those markets extended their slide in August, while lube consumption in Brazil extended its rise. But the increase was the slowest in five months.Unless demand revives in those other markets, any extension of the slowdown in consumption growth in Brazil would add to the pace of the slide in the region’s lube demand over the coming months.Any such drop in demand would compound a typical slowdown in the region’s lube consumption during the fourth quarter of the year.Lower demand contrasted with rising supply.Regional base oils output and US base oils exports to Latin America rose to more than 193,000 tonnes in August.The volume rose from less than 188,000 tonnes in July and by 3% from year-earlier levels. The year-on-year increase was the first since January.Supply rose from year-earlier levels as higher output outweighed a drop in US exports to the region. The last time US exports to Latin America rose was at the end of last year.The dip in exports left Latin America’s supply lagging demand throughout most of this year, including in August. But the shortfall in August was the smallest in three months.Regional base oils output is likely to continue to outpace year-earlier levels throughout the rest of 2024 amid scant scheduled plant maintenance work.Steady output would contrast with a heavy round of plant maintenance work in Brazil during second-half 2023.US exports to the region mostly held in a 130,000-150,000 tonne/month range throughout most of the past year.An extension of exports at those levels, combined with steady regional output and weaker demand, raised the prospect of the supply shortfall switching back to surplus over the coming months..Brazil’s August lube demand holds firm.Argentina’s August lube demand falls
