US’ Aug base oils exports to Latam fall

US base oils exports to Latin America fell in August to a four-month low amid a widespread slowdown in shipments to key outlets like Brazil and Argentina.

Exports of 460,310bl (64,810t) to Latin American markets, excluding Mexico, fell by 21pc in August from 579,200bl the previous month, government data showed.

A 10pc rise in exports from year-earlier levels mostly reflected a pick-up in shipments to Panama and Ecuador.

Shipments to other markets like Chile, Colombia, Brazil and Argentina fell from year-earlier levels.

The rise in shipments lifted total US exports to Latin America to 3.92mn bl in the first eight months of the year.

The volume was up 6pc from 3.71mn bl during the same period last year and outpaced the less-than 1pc rise in total US exports during the same period.

The faster rise in exports to Latin America so far this year partly reflected recent plant maintenance work in the US that had a larger impact on shipments bound for Europe.

High US prices relative to other markets also kept shut the arbitrage to markets like India from the end of the first quarter of the year.

Demand in Latin America had also extended last year’s recovery into the first half of this year.

Some of those dynamics were now changing.

Maintenance work is set to continue in the US over the coming months. More of the plants affected focus export volumes more on Latin America and less on Europe.

US prices eased in recent weeks. But they remained at levels that kept wide open the arbitrage to move shipments to Latin America from other regions like Asia-Pacific and Mideast Gulf.

The steady flow of arbitrage shipments from those regions helped to cover a rising share of Latin American demand.

That demand was waning in a growing number of those markets as economic growth slowed.

Brazil was one such market where lube demand has slowed in recent months.

US exports to that market fell in August to a five-month low of less than 200,000bl.

Argentina covered more of its requirements with arbitrage shipments from the Mideast Gulf during the third quarter.

US shipments to that market fell in August to little more than 1,000bl, from more than 24,760bl the previous month.