Germany’s June lube demand falls

Germany’s lubricating oil demand fell in June at its fastest pace in four months amid a slump in consumption of industrial oils.

Lube demand fell by 12pc in June from a year earlier to 69,760t, government data showed.

Consumption of process oils fell by 24pc in June and metal-working fluids by 28pc.

Demand for engine oils also fell. But the 0.2pc drop in consumption was small relative to the slide in industrial oils demand.

A faster fall in industrial oils consumption than automobile oils mirrored a similar trend in other markets like France and Italy.

The steeper fall in industrial oils consumption reflected the earlier slowdown in manufacturing activity compared with the services sector as economic growth slowed.

The steeper fall in Germany’s total lube demand compared with other major European markets coincided with the earlier slowdown in the country’s economic growth.

Its industrial production fell in June for a fourth straight month. Business confidence has slumped since then.

An upshot of the slowdown in lube demand was to counter slightly the tight availability of base oils during the first half of the year.

Base oils supply was tight because of plant maintenance work, refiners seeking to prioritise diesel production, and a drop in shipments from Russia.

Germany’s lube consumption of 437,840t in the first half of the year was down 10pc or more than 49,000t from 486,950t during the same period last year.

Regional base oils prices still surged in the first half of the year in response to the supply tightness. But most of the price-rise was in the three months to May.

Prices were steadier, then lower since then as waning lube demand magnified the impact of improving supply availability.