Germany’s July lube supply falls

Germany’s lubricating oil supply fell in July as lube production and imports dipped for a second month.

Total lube output of 139,680t in July fell by 23pc from year-earlier levels to a 25-month low, government data showed.

Lubricating oil imports fell by 9pc in July to 24,980t.

Total supply, or production and imports combined, came to 164,650t in July.

The volume fell for the ninth time in 11 months to the lowest since mid-2020. The country was in the midst of managing the Covid-19 pandemic at that time.

The slowdown cut total supply to 1.28mn t in the first seven months of the year. The volume was down 9pc, or more than 120,000t, from 1.40mn t during the same period last year.

Lube supply fell as slowing industrial, services and consumer activity cut domestic and regional demand. The slowdown in economic activity was set to worsen over the following months.

The drop in supply was especially steep for industrial oils.

Output of metalworking fluids fell by more than 25pc in each of the last four months to July. Production of process oils fell by more than half in July from the previous year.

The lower output mirrored Germany’s slowing industrial production, which contracted in August on a month on month basis for the first time in five months.

Engine oils remained the outlier. Production of the automotive lubricant rose in July for a second month. Higher output coincided with rising domestic consumption of the product.

The drop in lube output and imports cut demand for base oils feedstock to produce the lubricants.

Falling demand for base oils coincided with improving availability of the product during the third quarter of the year.

Regional base oils prices fell during the third quarter in response to rising surplus supply.