Germany’s August lube demand falls

Germany’s lubricating oil demand fell in August for a twelfth month mostly because of weak overseas consumption.

Domestic consumption of 69,510t in August edged down by 0.5pc from year-earlier levels, government data showed. The contraction was the smallest since a rise in demand in May.

Lube consumption got support from rising demand for engine oils and metalworking fluids.

Firm demand chimed with rising car sales and industrial production in Germany in August and September.

Steady consumption contrasted with expectations of slowing economic activity and lube demand in the third quarter in response to waning consumer demand and rising energy costs.

But Germany’s industrial factory orders fell in September from the previous month for the seventh time in eight months and at their fastest pace since March.

The drop in foreign orders was especially steep.

Factory orders are more reflective of future demand.

A 26pc fall in Germany's lube exports to 92,460t in August tallied with signs of weaker overseas demand.

The volume was the lowest since May 2020, when a large portion of Europe was in lockdown during the Covid-19 pandemic.

Lube exports are similarly more reflective of upcoming rather than current lubricating oil consumption.

The drop in exports reflected a 69pc slump in demand for process oils and a sharp fall in shipments of metalworking fluids.

Combined domestic and export lube demand of 161,970t in August fell by 17pc from year-earlier levels to the lowest since June 2020.

The fall in domestic and export consumption for a 12^th month cut total lube consumption by almost 300,000t in the first eight months of the year versus the same period last year.

The prospect of a further drop in demand coincided with improving base oils availability in the European market from the third quarter of the year.

Europe's base oils prices fell in recent months in response to the growing supply-demand imbalance.