Global base oils – week of Oct 31: Demand outlook

·        US economy shows more signs of slowing.

·        US central bank expected to raise interest rates by another 0.75 percentage points this week; another large rate-increase predicted for December.

·        US economy returns to growth in Q3, masking slowing consumer spending.

·        US 30-year mortgage rates exceed 7pc for first time in 20 years.

·        US September home sales fall more than 10pc year on year.

·        US house prices fall in August from previous month for second time in a row, for first time in more than a decade.

·        US gasoline demand falls year on year for 30th straight week.

·        Lube blenders already typically cut inventories before year-end.

·        Concern about impact of economic slowdown likely to add to preference to minimize stocks.

·        Slowing economic growth, ongoing wave of arbitrage shipments likely to curb demand from buyers in Latin America.

·        Brazil’s October consumer confidence holds close to highest in more than two years.

·        Argentina’s October consumer confidence slides further.

·        Argentina takes delivery of more base oils supplies from Mideast Gulf in September, for second month in a row.

·        Argentina’s rising imports curb supply requirements from domestic producers.

·        European central bank raises interest rates to highest in more than a decade; more increases to come.

·        Germany, Italy, France October inflation extend rise as economies slow.

·        Falling export base oils prices likely to add to pressure on domestic/regional prices as export-domestic price spread widens.

·        Weaker lube demand increases importance of competitive price for finished lubricants, adding to pressure for lower base oils prices.

·        Asia-Pacific buyers likely to remain cautious amid ongoing signs of healthy availability, limited pick-up in Chinese consumption, pressure on currencies.

·        China’s October manufacturing activity shrinks.

·        More Chinese cities face lockdowns to stamp out Covid-19 outbreaks.

·        China’s car sales likely fell in October year on year and from September as lockdowns hamper demand.

·        Chinese blenders likely to procure supplies to cover immediate requirements, minimize stocks amid uncertainty about timing, location of lockdowns.

·        Chinese demand for overseas supplies could slow if domestic base oils production rises.

·        Asia-Pacific buyers that procured large volumes from Japan likely to need to tap other suppliers.

·        Indian buyers likely to seek supplies, but face little urgency amid signs of healthy availability, steady-to-lower prices.

·        Indian demand for very light-grade base oils likely to remain muted.

·        Global automobile sales rise in September at fastest pace in more than a year.