Rising lube demand softens usual year-end seasonal slowdownFirmer demand strengthens expectations of broader Europe recoveryFirmer demand speeds up need to replenish stocks in early 2026.Italy’s lubricants demand rose in December for a seventh month, softening the impact of the usual year-end seasonal slowdown and adding to signs of a broader recovery in Europe’s lube market..Europe’s Nov Lube Demand Stays Mixed: Spain Rises, France Weakens.Italy’s total lubricants demand rose to 26,500 tonnes in December, up 2% year on year, MET data showed.Consumption fell 23% from November, reflecting the seasonal dip in year-end demand.But the contraction was much smaller than the 38% month-on-month fall in demand in August, when demand typically faces its first seasonal lull each year.Italy’s lubricants consumption is a useful bellwether for the direction of Europe’s lube demand in view of the early release of the country’s monthly data and its tendency to lead demand trends across the region..Key Highlights· Heavy-duty engine oil (HDEO) consumption rose 9% year on year in December, more than offsetting a second straight monthly fall in passenger-car motor oil demand.· Industrial oils demand edged up 1% year on year, marking a third straight monthly rise and continuing a trend of tracking HDEO demand trends.· Italy’s lube consumption rose by 4.5% in the three months to December, the strongest growth since August.· Rising demand raised the prospect of an extension of the recent improvement in Europe, where three-month lube consumption growth has typically followed the same trajectory as Italy..· The sustained recovery lifted Italy’s lube consumption demand to 389,000 tonnes in 2025, up 1% year on year and the highest since 2021.· Italy’s domestic base oils supply, as a share of total lube consumption, returned to more typical levels in December after slumping in November, when base oils output fell to a seven-month low..Italy’s November Base Oils Output Falls To Seven-Month Low.· The higher base oils share of lube consumption pointed to a recovery in domestic base oils production in December..Market RepercussionsAn extension of the recovery in Italy’s lube consumption cut the size of the seasonal year-end slowdown and raised the prospect of faster inventory replenishment at the start of 2026.A repeat of that pattern throughout the rest of Europe would magnify the trend.Firmer regional demand would coincide with signs of tighter-than-usual supplies of Group I and Group III base oils during the final months of last year..Europe’s November Group I Base Oils Exports Fall to Six-Month Low
