Peru’s Jan base oils/lube imports fall

Peru’s base oils and lube imports fell to a three-month low in January as social unrest magnified a slowdown in economic growth.

The prospect of even slower growth and uncertainty about the possibility of further disruption boosted the attraction of procuring smaller volumes and faster delivery of base oils and lubricants supplies.

The arbitrage to move more supplies from Asia-Pacific to Peru was anyway less feasible than several months earlier.

The arbitrage to move supplies from Europe to Peru was even less common.

Even so, there was also an unusual pick-up in Group I base oils supplies from Latvia to Peru. The Baltic country, which shares a border with Russia, has no domestic base oils production capacity of its own.

The rare shipment coincided with moves by suppliers of Russian base oils to line up alternative outlets in response to Europe’s ban on base oil imports from the country.

Peru’s base oils and lube imports of around 5,700 kilolitres (5,050t) in January fell from more than 7,700kl the previous month, provisional customs data showed.

The drop in shipments was the sixth in seven months from year-earlier levels.

The fall in shipments mirrored a slowdown in the country’s economic activity.

Economic growth slowed in December to its lowest since early 2021. The country’s industrial production fell in December at its fastest pace since mid-2020.

Economic growth likely stayed low in January as protests continued throughout the month.

A drop in base oils supplies in markets like the US and South Korea at the end of last year likely added to the slowdown in shipments to Peru.

Base oils imports from the US fell to a three-month low in January.

The slowdown followed a fall in US base oils exports to Latin America in December to an eleven-month low.

The share of supplies from the US still rose to the highest level in four months. The rising share reflected the less attractive arbitrage from Asia-Pacific during the final months of last year.

The share would have been even higher but the delivery in January of Group I light and heavy-grade base oils from Latvia.

Except for the shipment of less than 50t in early 2022, the supplies from Latvia were the first in years.