Base oils imports held firm in March, offsetting lower domestic output amid already-tight supply-demand fundamentals
Brazil’s elevated reliance on imports increased exposure to any change in US export availability
Group III shipments accounted for a smaller share of imports, masking their outsized importance to the supply balance
Brazil’s base oils imports held firm in March, helping to offset any extended drop in domestic output at a time when supply-demand fundamentals were already tight.
Total imports came to 62,200 tonnes in March, edging down from close to 65,000 tonnes in February but rising 42% year on year, MDIC data showed.
Brazil’s reliance on imports increased further in February after unexpected plant issues cut domestic output to a 27-month low.
While steady inflows helped sustain supply buffers through March, Brazil remained more exposed to global supply disruptions and a seasonal rise in demand in the US from the end of the first quarter.
Key Highlights
· First-quarter imports from the US rose to the highest level since the first half of 2025, with their 78% share of inflows up from 74% throughout last year.
· Imports from South Korea rose to more than 17,000 tonnes in the first quarter, up from less than 12,500 tonnes in the previous quarter and the highest in more than four years.
· First-quarter imports from the Middle East fell to less than 13,500 tonnes, the lowest in more than a year, even with a jump in March shipments from the UAE to the highest since the first half of 2024.
· Shipments from Group III producers accounted for 19% of total imports in the first quarter, down from a 23% share in the previous quarter.
Market Repercussions
Brazil’s reliance on the US for most of its imports reflected the logistical proximity of the two markets and consistent availability from US suppliers.
That concentration also left Brazil more exposed to any change in US export volumes, particularly with domestic and overseas demand for US supplies rising simultaneously.
The smaller share of shipments from other countries reduced exposure to disruptions in those regions.
But most of those shipments consisted of Group III base oils, a segment the US was less able to replace. Middle East suppliers accounted for around half of those volumes.
With Middle East shipments facing a pause in the coming months, the impact could be disproportionate to the relatively small share of total imports.