Asia’s April lube demand rises

Asia’s lube demand rose in April from year-earlier levels for the first time in three months, cushioning the impact of a seasonal slowdown in consumption from the previous month.

The region’s lube demand usually falls sharply in the month of April after a seasonal surge in consumption in the month of March.

The slowdown in consumption at the start of the second quarter of the year frequently triggers a rise in surplus base oils supplies, followed by downward pressure on prices.

The prospect of such a scenario increased this year after a smaller-than-usual seasonal rise in lube consumption in March limited any base oils supply-tightness at the end of the first quarter.

Firmer-than-expected lube demand in April instead curbed the prospect of such a scenario of rising surplus supplies.

The region’s lube consumption of more than 745,000 tonnes in April rose by 8% from year-earlier levels, government and industry data showed.

The volume excluded China.

Demand still fell from more than 865,000 tonnes the previous month.

But the size of the month-on-month contraction was smaller than the 230,000-tonne fall in consumption during the same two-month period last year.

The smaller drop in consumption in April from March followed the smaller rise in demand in March from February.

The trend could have reflected a preference by blenders and end-users to maintain lower stocks and to replenish inventories more frequently.

Such a move would partially level out a seasonal surge and subsequent drop in consumption in the months of March and April.

Lube consumption in southeast Asia rose by 6% and for a second month in April amid signs of improving demand in markets like Vietnam and the Philippines.

Lube demand in northeast Asia rose by 10% in April from year-earlier levels and unusually exceeded consumption volumes in the month of March.