Thailand’s lube demand slumped to a four-year low in July in the face of a confluence of seasonal, industrial, political and geopolitical factors.A typical seasonal slowdown in lube demand in July coincided with a dip in Thailand’s manufacturing activity, mostly because of refinery and automobile-plant maintenance-work.Activity in the services sector also ebbed as tourism activity and revenue slowed amid a flare-up in a border-conflict between Thailand and Cambodia.The suspension of Thailand’s prime-minister in early July and subsequent political crisis compounded the impact on economic activity.Those various factors played out against the backdrop of negotiations over the size of US tariffs on imports from Thailand.Thailand’s lube demand could get a boost from the recent resolution or reversal of several of those issues, including a seasonal pick-up in consumption. Some of the factors remained unresolved, raising the prospect of an ongoing drag on the country’s economic activity and lube demand. Thailand’s lube consumption of 30,600 cubic meters (27,000 tonnes) in July fell from close to 44,000 cubic meters in June and for a fifth month from year-earlier levels..The volume was the lowest since July 2021, while the size of the 21% drop in demand was the steepest in more than two years.Consumption of passenger-car motor oils (PCMO) fell even more sharply, with the 39% contraction the steepest in more than a decade.Demand for PCMO is considered a useful bellwether for the state of activity in the services sector..The slump in lube demand likely left blenders with higher-than-expected inventories of finished lubes and base oils feedstock supplies.Weaker demand and higher stocks in turn cut requirements for base oils shipments from domestic and overseas suppliers.The drop in demand for domestic supplies cushioned the impact of a fall in Thailand’s base oils output in July because of plant-maintenance work.Spot shipments of Group I base oils from Thailand’s refiners became available in second-half August, shortly after the completion of the maintenance work.Refiners typically replenish depleted stocks after maintenance work, curbing availability of surplus supplies.The availability of the shipments so soon after the maintenance work instead pointed to larger-than-expected supply following the slump in demand. .Thailand’s July base oils output falls
