France’s October lube demand falls

France’s lube demand fell for a fifth month in October as engine oils consumption dipped.

Passenger car engine oils (PCMO) demand had held firm in August and September even as France’s total lube consumption fell.

That support disappeared in October as a slowdown in France’s industrial activity extended to the services sector.

The slowdown is likely to extend into next year as high energy costs and weak household consumption squeeze economic activity.

Lube demand of 43,870t in October fell by 8pc from year-earlier levels, according to Centre Professionel des Lubrifiants (CPL).

The contraction outpaced the 4pc fall in consumption to 441,050t in the first ten months of the year.

PCMO demand in Europe had held firmer than industrial oils in the third quarter of the year as industrial activity slowed faster than activity in the services and retail sector.

The firmer PCMO consumption had cushioned the slowdown in total lube demand.

The trend now showed signs of reversing.

France’s manufacturing purchasing managers’ index pointed to contraction in December for a fourth month. But it rose for a second month to its highest since August amid a pick-up in business confidence.

France’s 2pc fall in industrial oils consumption in October was its smallest contraction in five months.

The improvement contrasted with a further dip in the country’s services PMI in December to its lowest in almost two years.

France’s 16pc fall in PCMO consumption in October dipped from a 3pc rise in sales in September. PCMO is considered to be more reflective of activity in the services and retail sector.   

Europe’s base oils prices fell steadily throughout the second half of the year in response to weak demand and more plentiful supply.

Blenders preferred to hold off securing additional base oils supplies during the final weeks of this year even with prices at unusually low levels.

The moves left them exposed to the possibility of needing to procure more supplies in the coming months if the slowdown in lube demand is smaller than expected.