Latin America’s lube demand edged up in July amid firmer requirements in markets like Peru and a more muted slowdown in consumption in Mexico and Brazil.Steady demand still exceeded slightly a larger rise in the region’s base oils supply.The supply shortfall likely left blenders with low stocks and raised the prospect of a pick-up in requirements to replenish those inventories.The persistence of that shortfall instead suggested that blenders were comfortable to maintain lower inventories. They were also confident that they could secure replenishment supplies as and when required.The dynamic raised the prospect of more regular demand for smaller volumes of base oils supplies.Requirements for smaller volumes boosted the attraction of increasing procurement from domestic or regional base oils producers.More regular demand for smaller volumes could complicate any moves by US suppliers to boost shipments to Latin America in the coming months to help clear surplus supplies in their domestic market.Latin America’s lube consumption rose to more than 215,000 tonnes in July, government data showed..The volume rose from less than 205,000 tonnes in June and by 1% from year-earlier levels amid firmer requirements in markets like Chile.Brazil’s lube demand edged down in July but at its slowest pace in five months. The contraction in Argentina’s lube demand was the smallest in four months.Mexico’s lube demand edged down in July for the eighth time in nine months. But industrial oils consumption fell at its slowest pace in more than a year..Steadier demand coincided with a rise in Latin America’s base oils supply amid higher output and a pick-up in shipments from the US to the region.Total supply, or regional output and US exports to Latin America combined, rose to more than 210,000 tonnes in July.The volume rose from less than 185,000 tonnes the previous month and for the fourth time in five months from year-earlier levels.Supply still lagged demand in July for a fourth month even as the shortfall narrowed sharply.The lack of any surge in supply in response to the persist shortfall suggested that blenders were comfortable maintaining lower stocks.Concern about slower economic growth and uncertainty about the strength of lube consumption boosted the attraction of such a strategy.Expectations that base oils supply was readily available, and the lack of upward pressure on prices in response to lower stocks, added to the attraction of procuring smaller volumes more frequently..Brazil’s July lube demand holds steadier.Argentina’s July lube demand falls.Asia’s July lube demand rises.Base Oil News stories and analysis also available on ICIS platform
