Latin America’s lube demand fell in May for the sixth time in seven months as shrinking consumption in Mexico and Argentina countered rising demand in Brazil.Base oils supply fell more steeply than demand as a slump in US shipments to Mexico and South America more than outweighed a rise in the region’s base oils production.The contrasting trends flipped a large supply surplus in the region in the first half of last year especially to increasingly tight availability in recent months.The supply tightness highlighted Latin America’s reliance on the US market for most of its base oils imports.That reliance left it unusually exposed to the risk of any disruptions to US shipments.Forecasts of an unusually active Atlantic hurricane season this year highlighted that risk and raised the prospect of such supply disruptions.Any such disruptions would leave Latin America facing a shortfall even if lube demand continued to trend lower.The region’s lube consumption of more than 192,000 tonnes in May fell from around 200,000 tonnes in April and by 5% from year-earlier levels, government and industry data showed.Mexico’s lube demand fell by 11% in May as automobile lube consumption extended its sharp slump.Argentina’s lube demand fell in May by more than 15% for a fifth straight month.But the year-on-year drop in Latin America’s lube demand lagged the steep fall in base oils supply from the region’s key sources.Latin America’s base oils output, along with US base oils exports to South America and Mexico combined, came to close to 199,000 tonnes in May.The volume dipped slightly from the previous month and by a steeper 25% from year-earlier levels.The surplus of supply over demand duly held at less than 10,000 tonnes in May for a second month, down from more than 25,000 tonnes in each of the first two months of the year. .US’ May base oils exports to South America rise.Brazil’s May base oils supply-demand balance stays tighter.Argentina’s May lube demand falls more slowly
