Germany’s December lube demand falls

Germany’s domestic and overseas lubricating oil demand fell for an eighteenth month in December to the lowest in at least seven years.

A regionwide economic slowdown in Europe compounded a seasonal drop in Germany’s lubricants consumption.

The fall in lube demand mirrored a similar slowdown in markets like Spain and Italy and compounded a typical overhang of surplus base oils supplies at the end of the year.

Concern that lube demand would extend its contraction prompted blenders to hold off replenishing depleted stocks at the beginning of this year.

The moves left surplus base oils supplies available for longer. The trend kept downward pressure on prices well into the month of February.

Even if lube consumption continues to shrink from year-earlier levels, it typically gets a seasonal lift from around the end of the first quarter of the year.

Blenders’ reluctance to replenish stocks could leave their supply tight when that seasonal pick-up in lube demand kicks in.

Germany’s domestic and export lube demand fell to less than 107,000t in December, government data showed.

The volume fell from 143,600t in November to the lowest since at least 2016.

The country’s domestic lube consumption of close to 38,000t in December fell for a third month and by 18pc from year-earlier levels.

The slowdown cut Germany's total consumption to 748,610t in 2022.

The volume fell from 773,760t in 2021 to the lowest in more than eight years.

Demand fell sharply in December for everything from engine oils to hydraulic fluids and metalworking oils.

Engine oils demand had previously continued to rise even as total consumption slowed.

Lube exports of around 68,500t in December fell for a seventeenth month and by 31pc from year-earlier levels.

The fall in lube exports was more prolonged and steeper than the slowdown in Germany’s domestic demand.

The extended and large fall in lube exports suggested that some overseas buyers were covering requirements with supplies from other sources.