Mexico’s lube demand fell for an eleventh month in March, adding to signs of a slowdown in the country’s economic growth.Lube consumption of 51,500 kilolitres (45,600 tonnes) in March was steady from the previous month but fell by 18% from year-earlier levels, government data showed.The year-on-year contraction was the steepest in three months.Consumption of automobile lubricants fell by 27% in March and industrial oils by 10%.The steeper contraction coincided with a fall in Mexico’s industrial production in March for the first time in more than three years.The slowdown included a drop in the country’s automobile production in March for the second time in four months.The drop in Mexico’s lube demand contrasted with a surge in US base oils and lube exports to the country that gathered pace in the first quarter of this year.The surplus of US base oils and lube exports over Mexico’s finished lube demand widened sharply in response.The dynamic could slow down in the second quarter of the year irrespective of any change in Mexico’s finished lube demand.Tighter surplus base oils availability in the US curbed pressure on its refiners to clear supplies in overseas markets like Mexico.The rebound in US Group II light-grade base oils prices relative to feedstock and diesel prices since late March similarly raised the prospect of curbing some overseas demand for the supplies.US Group II light-grade export prices had held at a steep discount to heating oil prices throughout most of the first quarter of the year.The price-weakness incentivized the redirection of light-grade base oils supplies into the diesel pool.The firmer prices in recent weeks curbed the attraction of such moves..US March base oils exports to Mexico rangebound
