Demand rises for first time this year
Firmer demand could speed up blenders' need to replenish stocks
Firmer demand precedes base oils production issues in Q4
Latin America’s lube demand showed signs of recovery in September for the first time this year, driven by stronger consumption in Brazil and Mexico.
The growth also extended to other markets like Chile and Peru, signalling a broader regional improvement.
Argentina remained the major outlier, with domestic lube demand continuing to contract amid prolonged economic pressures.
Regional consumption reached close to 200,000 tonnes in September, up 4% from year-earlier levels, government data showed.
The September uptick, the region’s first this year, adds momentum to the firm demand trends already visible across Asia during the third quarter.
The improvement likely accelerated the drawdown of blenders’ base oils inventories, triggering an earlier need to replenish stocks heading into the fourth quarter.
Any extension of the recovery in demand could prompt blenders to shift away from the lean-inventory strategies seen in markets like Brazil in recent months and support moves to rebuild stock levels.
Already-tight inventories and firmer lube consumption could support an increase in demand for base oils imports in the coming months.
Unexpected base oils production issues in Brazil and Argentina in the fourth quarter of the year could further amplify those import requirements.
