Italy’s lube demand rose in August for the fifth time in six months from year-earlier levels as strong automobile-lube consumption outweighed a drop in industrial oils demand.The year-on-year rise in demand cushioned the size of the seasonal drop in Italy’s lube consumption in August from the month of July.The fall in demand from July was still large.The month-on-month fall in lube demand in August likely repeated itself throughout Europe.Any repeat throughout Europe of the size of the drop in demand that Italy faced in August would require a similarly large fall in the region’s base oils supply to keep fundamentals balanced.Europe’s premium-grade base oils margins trended higher during the third quarter of the year. The firm margins suggested that there was a significant adjustment in those supplies to match demand.Europe’s Group I base oils margins weakened during the third quarter. The softer margins pointed to an imbalance between supply and demand and to pressure to adjust supply accordingly.Italy’s lube consumption of 23,000 tonnes in August rose by 4% from year-earlier levels, government data showed..Automobile lube consumption rose by 11% and for the sixth time in seven months from year-earlier levels.Industrial oils consumption fell by 2% in August as weaker metalworking fluids demand outweighed firmer consumption of products like hydraulic oils.Italy’s lube demand still fell by 38% in August from the previous month..The contraction was similar to the same period last year and widened from a 31-32% fall in demand during the same period in 2022 and 2023.Italy’s 38% fall in lube consumption in August 2024 from the previous month outpaced the 30% drop in Europe’s lube demand during the same period.The contraction left Europe’s demand more than 65,000 tonnes lower in August 2024 from the previous month.Italy’s smaller contraction in demand in August from July in 2022 and 2023 also outpaced Europe’s smaller contraction during those two years.The dynamic suggested the size of Italy’s seasonal contraction in demand was larger than Europe, but the trend was similar.An extension of that trend this year could again trigger a larger-than-usual drop in Europe’s lube consumption in August from July.Spot shipments of Group I base oils from Europe to Nigeria rose in August, while shipments to southeast Asia rose during the third quarter of the year.The shipments helped to remove Group I supply from Europe, cushioning the impact of weaker regional demand..Italy’s July lube demand rises.US July base oil exports to Europe stay low.Europe’s July Group III base oils supply rises.Base Oil News stories and analysis also available on ICIS platform
