Germany’s July lube demand falls

Germany’s domestic and overseas lube demand fell in July for an 11^th month amid a regionwide slowdown in economic activity.

Domestic lube consumption of 73,000t in July fell by 5pc from the same month a year earlier, government data showed.

Lube exports of 107,420t in July fell by a steeper 22pc from year-earlier levels.

Combined domestic and export demand of 180,420t in July fell by 16pc from the same period last year.

The pace of the contraction was similar to the 17pc fall in demand to 1.31mn t in the first seven months of the year.

Domestic and regional lube demand slowed in the face of rising energy costs, high inflation, and waning consumer consumption.

The slowdown in economic activity was expected to worsen in the fourth quarter of the year.

The impact of high energy costs has been particularly disruptive for Germany’s economy. The country’s industrial production fell in August from the previous month, even as output rose in other markets like France and Italy.

Even so, the contraction in Germany’s domestic lube demand was smaller than the size of the drop in lube exports.

Domestic demand fell more slowly as rising consumption of engine oils, hydraulic oils and metalworking fluids cushioned a slump in sales of process oils and white oils.

Lube exports enjoyed no such support. Shipments fell for every type of lubricants, with metalworking fluids exports down 24pc and hydraulic oil sales down almost 20pc.

Lubricant exports tend to be more reflective of future demand in view of the time to deliver the supplies to other markets.

Domestic lube consumption is more reflective of immediate demand.

The slower lube demand coincided with and compounded improving availability of base oils supplies in the European market during the third quarter of the year.