· US April/May jobs, consumer spending, trade data point to strong Q2 economic growth.· US manufacturing purchasing managers index unexpectedly rises in May from April.· US lube demand surges in March to highest since 2019.· Latin America demand signals more mixed.· Argentina and Brazil’s April lube demand slows yoy.· Argentina’s May auto sales rise for third month and at fastest pace in a year..· US base oils demand holds firm on strong consumption, stock-building in preparation for hurricane season, concern about even higher prices.· Brazil base oils demand likely to be steady amid balanced domestic market / slower lube demand growth.· Europe faces ongoing pressure from weakening consumer demand, high inflation.· European services sector partially cushioned by post-pandemic bounce.· Europe’s automobile oil consumption holding up firmer than industrial oils demand.· Rising motor fuel costs likely to put pressure on travel activity.· Upcoming tourist season likely to counterbalance that pressure in the short term.· France’s May car sales fall for 12th month..· Europe base oils demand likely to get support from ongoing supply tightness as buyers prioritize security of supply.· Slowing lube demand likely to complicate blenders’ ability to pass on higher costs.· Typical seasonal slowdown from July and prospect of easing supply tightness add to buyers’ incentive to hold off/minimize procurement over coming weeks.· Japan’s industrial production slows in April, consumer demand rises.· China’s PMI for May points to ongoing contraction, but improvement from April. Services lag manufacturing.· Rebound in Chinese economic activity as pandemic restrictions ease likely to be smaller than in 2020.· China’s May car sales set to have fallen at slower pace yoy than April, rise vs April.· India’s monsoon season began in late May, slightly earlier than usual.· India’s lube demand typically slows during monsoon season.· Asia-Pacific base oils demand likely to get some support from firmer Chinese demand.· Chinese buyers would need to raise prices sharply to make arbitrage to the country more attractive.· That didn’t happen even in 2020. That time, Chinese prices were already at a steep premium to fob Asia prices.· Retail diesel prices in India hold steady; their premium to very-light grade base oils falls even more.· Indian demand for light-grade base oils typically slows when diesel premium is narrower.· Asia-Pacific base oils demand likely to get supplemented with sustained buying interest from more distant regions like Americas, Mideast Gulf and Europe, where prices remain at steep premium to Asia..Global base oils – week May 30: Demand.Base Oil News stories and analysis also available on ICIS platform
