Latin America’s lube demand rose for a third month and more than expected in December amid strong consumption in Brazil and a more muted slowdown in markets like Argentina and Mexico.The region’s total lube consumption of more than 175,000 tonnes rose by 4% in December from year-earlier levels, government and industry data showed.Firmer demand cushioned the size of the drop in consumption from November to around 12,000 tonnes, versus 17,000 tonnes during the same period at end-2023.Demand got support from a 7% rise in Brazil’s lube consumption in December from a year earlier.Mexico’s lube demand shrank by 3% in December. But the contraction slowed from a 10% drop the previous month.Latin America’s firmer demand contrasted with a sharp dip in the region’s base oils supply.Total supply, or regional output and US exports to Latin America, fell to less than 165,000 tonnes in December.The volume fell by 22% from year-earlier levels and from more than 190,000 tonnes in November.The slowdown mostly reflected a slump in exports from the US to the region to a two-year low.Supply duly lagged demand for first time in three months and erased most of the surplus in October and November.The shortfall contrasted with a large surplus in December 2023 and during the first two months of 2024.The large surplus at the start of last year curbed any urgency for regional blenders to procure replenishment supplies.A sharp fall in US base oils export prices in the first quarter of last year added to the attraction of holding back.The shortfall at the end of last year by contrast increased pressure on the region’s blenders to bring forward their stock-replenishment plans in preparation for a seasonal rise in consumption at the end of the first quarter of the year.Expectations of a typical drop in US base oils export prices at the start of the new year incentivized buyers to hold back.Such a scenario failed to materialize this year amid signs of a more manageable surplus in the US.Delayed moves to procure supplies narrowed further the time to lock in sufficient volumes to cover the seasonal rise in demand..Brazil’s December lube demand rises.Argentina's December lube demand falls more slowly.Latam lube demand set for seasonal rise.US Dec base oil exports to S America fall.Base Oil News stories and analysis also available on ICIS platform
