S Africa June base oils imports rebound

South Africa’s base oils imports rebounded in June to a 12-month high at a time of increasingly mixed economic signals.

Total base oils imports of 39,190 kilolitres (34,720t) in June rebounded from a four-month low of 23,240kl in May, government data showed.

The increase in supplies boosted total imports to 160,710kl in the first half of the year. The volume was down 8pc from 175,010kl during the same period last year.

The volume was still the second highest in the last five years for that six-month period.

The slowdown in shipments in May had coincided with a sharp drop in the Netherlands’ May base oils output to a 20-month low. Base oils output in the US also fell in April.

The two countries are the largest sources of base oils supplies for the South African market.

A seasonal rise in European lube demand and tight supply also attracted more shipments to that region in May.

Some of those dynamics that had tightened supply then began to unwind the following month.

The steady base oils flows to South Africa so far this year coincided with firm economic growth in the first quarter of the year.

A sustained rise in the country’s automobile sales since early last year extended into July.

But waning business confidence and rising inflation and interest rates raised uncertainty about the sustainability of that rise in auto sales.

An expected economic slowdown in Europe would exacerbate the impact on South Africa’s automobile industry. The region is South Africa’s largest export market.

Any slowdown in lube and base oils demand would coincide with signs of more plentiful availability in markets like Europe, US, and South Korea.

South Africa’s imports of more than 15,000kl from the Netherlands in June were the highest in more than eight years.

Imports from South Korea in June were the highest in more than four years. Shipments from the US were the highest in a year.