Italy's lubricants demand fell for the first time in 12 months in May, breaking the usual seasonal pattern after March-April's disruption-driven surge
The contraction added to signs from other regions that buyers were curbing requirements as supply improved and inventories rose
Italy's slowdown pointed to a broader shift from stock-building towards inventory drawdowns that could weigh on lubricants and base oils demand during the third quarter
Italy's lubricants demand fell in May just when it typically rises, pointing to the disruption-driven buying of March and April beginning to reverse.
Demand slipped to 31,600 tonnes in May, dipping 2% from a year earlier and for the first time in a year, Ministry of Environment and Energy Security data showed.
The 10% month-on-month fall from April also broke the normal seasonal pattern.
Italy’s lubricants demand has increased from April to May in each of the previous four years. This year’s contraction instead followed unusually strong buying in March and April as buyers accelerated purchases to cover against supply disruptions.
Italy’s early data pointed to the European stock-building cycle beginning to reverse as supply concerns eased.
Key Highlights
Automobile lubricants demand edged up 0.6% year on year after growing 8% in April and 21% in March.
Industrial lubricants demand fell 5% after rising 11% in April and 9% in March.
Poland's lubricants demand also weakened sharply in May after strong growth during March and April.
Spain and Portugal recorded unusually strong demand growth through April after more subdued buying earlier in the year, pointing to a similar slowdown likely to emerge in May.
Italy's manufacturing confidence was unchanged in May after April weakened from March, contrasting with the earlier surge in lubricants demand.
Market Repercussions
Italy typically releases its data several weeks before other European markets, making it an early indicator for the region.
May’s fall pointed to buyers beginning to shift from building inventories toward consuming them. Demand was increasingly driven by underlying end-user consumption rather than concern about supply disruptions.
End-users holding elevated stocks and expecting improving supply had even less reason to procure additional volumes.
Easing demand coincided with steady or improving supply from the US, South Korea and other major exporters to Europe, further reducing the need to hold larger stocks.
The same factors that accelerated buying during March and April were now reversing, pushing buyers to delay purchases and draw down existing inventories.