Argentina’s lubricants demand rose for a fourth straight month in April, extending a global stock-building trend into a second month
Industrial lubricants led gains, rising 15% year on year and recording the fastest growth in 44 months
Base oils exports remained elevated, including continued Group I shipments to Brazil
Argentina’s lubricants demand rose in April at the fastest pace in six months, extending a global stock-building trend as buyers continued to cover against supply security concerns and elevated prices.
Lubricants consumption rose to 18,500 cubic metres (16,400 tonnes) in April, up 9% year on year and climbing for a fourth straight month, Ministry of Economy data showed.
Forward buying typically precedes a slowdown in requirements as buyers draw on accumulated inventories.
Argentina's lubricants demand accelerated instead, pointing to continued stock-building and concern over supply security.
The trend aligned with global buying patterns, adding to short-term tightness in base oils flows.
Key Highlights
· Lubricants consumption rose to the highest April volume in three years, with industrial oils posting the fastest growth in 44 months.
· Auto lubricants consumption rose 7% year on year, while industrial oils rose 15%.
· Base oils exports stayed elevated and near March levels, with a Group I shipment moving to Brazil.
· Total demand, or lubricants consumption and base oils exports combined, stayed above typical levels for a second month, reflecting the pick-up in overseas shipments for a third month.
Market Repercussions
The extension of March's demand surge into April pointed either to stronger underlying economic activity requiring higher lubricants consumption, or to continued inventory building by lubricant blenders and distributors.
An extension of moves to build stocks would leave buyers with less urgency to seek additional volumes once supply availability improved, prices stabilised and end-user consumption held steady or slowed.
Signs of easing tightness in Asia broadened global supply options, reinforcing buyers’ incentive to manage their inventory levels more cautiously.
Argentina’s sustained flow of base oils export shipments pointed to the incentive for refiners with spare capacity to boost output and lock in stronger global base oils prices.
The same incentive pointed to other refiners with spare capacity raising output to tap elevated export prices.
The combination of elevated inventories and high prices pointed to blenders focusing on working down stocks in the coming months.
Any pick-up in refiner output would then add to available supply at a time when blender requirements were already easing.