France’s August lube demand falls

France’s lubricating oil demand fell in August for the fourth time in five months on the back of sliding consumption of automotive and industrial lubricants.

Total lube demand of 36,680t in August fell by 5pc from year-earlier levels, according to Centre Professionel des Lubrifiants (CPL).

The steady fall in demand cut total lube consumption to 352,540t in the first eight months of the year. The volume was down 4pc from 366,750t during the same period last year.

An 18pc fall in demand from 44,650t in July followed a seasonal trend for the time of year.

The year-on-year fall in consumption reflected a relatively newer and growing trend of shrinking demand because of slowing economic growth.

The economic slowdown extended throughout Europe.

Rising energy costs, high inflation and shrinking consumer spending power cut short a revival in activity following the relaxation of pandemic restrictions earlier in the year.

Like some other countries, France got a boost from a seasonal rise in tourism activity in the third quarter of the year. Hotel occupancy levels in August were close to the highest in three years. They still edged down from July.

France’s passenger car engine oil (PCMO) sales were steady in August from year-earlier levels. The trend again mirrored other markets where firmer services activity supported PCMO consumption.

France’s industrial production was also higher in August compared with year-earlier levels.

But firmer industrial activity failed to translate into higher consumption of industrial lubricants.

Demand for these lubricants instead fell by 7pc in August to a two-year low.

The drop in demand preceded a fall in France’s manufacturing purchasing managers’ index in September to the lowest since second-quarter 2020, to levels that pointed to contraction.

Weaker lube demand curbed blenders’ need to replenish base oils feedstock supplies that were being consumed more slowly.

Expectations that lube demand would extend its slowdown over the coming months added to blenders’ preference to manage their base oils stocks and production carefully.

The trend was repeating itself throughout Europe, adding to a base oil supply-demand imbalance.