Europe’s June lube demand falls

Lubricating oil demand in Europe’s four largest economies fell in June for the ninth time in 10 months amid a dip in consumption of industrial oils.

Lube consumption in France, Italy, Spain, and Germany combined came to 186,050t in June, government and industry data showed. The volume was down 6pc from year-earlier levels.

The drop in consumption cut the four countries’ total lube demand to 1.13mn t in the first half of the year. The volume was down 6pc, or 67,000t, from 1.20mn t during the same period last year.

Lube demand had risen in May on the back of a boost in activity in the services sector especially following the relaxation of pandemic-related restrictions earlier in the year.

The recovery was short-lived as supply bottlenecks and rising costs put growing pressure on industrial activity in the region.

The pressure is set to grow over the coming months in the face of surging energy costs, rising interest rates, and the possibility of power cuts.

A steep slide in industrial oils consumption in June reflected the growing pressure on the manufacturing sector.

Industrial oils consumption in Germany, France and Italy combined fell by 14pc in June and by 11pc in the first half of the year

The contraction outpaced the 2pc fall in June consumption of automobile lubricants.

The drop in lube demand eased pressure on the tight availability of base oils in Europe in the first half of the year.

The steeper contraction in industrial oils consumption also likely had more of an impact on demand for Group I base oils than on premium grades.

Engine oils typically require premium-grade base oils like Group III supplies.

Availability of those supplies was more balanced in the first half of the year, especially compared with Group I base oils.