US base oils exports to Latin America rebounded in September to a six-month high amid a surge in shipments to Brazil and Argentina.
The rise in exports coincided with an increasingly regular flow of arbitrage shipments to markets like Argentina and Brazil from suppliers in Mideast Gulf and Asia-Pacific.
US base oils exports of 592,090bl (83,390t) to Latin America, excluding Mexico, rose by 25pc in September from year-earlier levels to the highest since March, government data showed.
The March shipments to Latin America had coincided with a surge in total US exports to a record high as producers cleared a wave of left-over supplies from late last year and early this year.
The September shipments to Latin America coincided with total US exports holding close to multi-year lows following plant maintenance work in the country throughout the third quarter of the year.
The US’ low total exports suggested the shipments to Latin America consisted more of term volumes than arbitrage supplies.
The rise in shipments to Latin America also came ahead of further plant maintenance work in the US in the fourth quarter of the year.
The timing suggested moves to build additional stocks in Latin American markets like Brazil to cover for a drop in supplies during the maintenance work.
US exports of 317,480bl to Brazil in September were up from more typical levels of around 218,000 bl/month over the past year.
The rise in shipments mostly reflected an increase in exports from the district of Houston-Galveston to around 184,000bl. The volume was the highest since April.
The rise in shipments to Brazil coincided with a sustained slowdown in the country’s lube demand in recent months.
The country has avoided a repeat of last year’s supply-build through lower base oils production and a drop in imports.
US base oils exports of 81,170bl to Argentina were the highest to that market in more than five years.
The rise in shipments followed a surge in Argentina’s base oils imports in August and September, mostly from Mideast Gulf. The higher imports coincided with a slump in domestic base oils production.
The rise in US exports to Argentina suggested that pattern was set to continue.