Mexico’s lubricating oil production extended its rise in March amid signs of firmer automobile sales and steady industrial production.
Lube output of 59,740 kilolitres (52,920t) in March rose by 10pc from 54,130kl the previous month and by 2.5pc from year-earlier levels, according to Mexican chemical industry association ANIQ.
Output of 168,600kl in the first three months of the year rose by 14pc from the same period last year.
Lube production already rebounded last year to a record high.
Higher output triggered a rise in lube production run rates to 80.3pc of installed capacity in March, up from 73.7pc the previous month.
Lube output has risen to meet firmer lube demand against the backdrop of steady economic growth.
Mexico’s automobile sales rose in May for the first time in nine months. Auto production rose in May for the first time in three months and at its fastest pace in a year.
Industrial production rose in April for a 14th straight month.
Rising lube output and consumption boosts demand for base oils. Mexico is reliant on the US for almost all of its base oil supplies.
Base oil exports from the US to Mexico fell sharply in March and April compared with more typical levels.
The trend likely reflects sufficient supplies to meet Mexican lube blenders’ feedstock requirements, as well as a sharp drop in shipments of very-light grade base oils.
A large portion of those light-grade supplies have been used in Mexico as a fuel extender in recent years.
Unusually high diesel prices relative to crude have incentivized US refiners to redirect light-grade base oils back into the diesel pool. The move curbs availability of the supplies for markets like Mexico.