Thailand's July lube demand firm

Thailand’s lube demand rose in July for a fifth month as the country’s economy extended its rebound.

Lube demand of 48,480 kilolitres (42,940t) in July rose by 11pc from the same month a year earlier, government data showed.

Consumption fell by 20pc from 60,600kl in June, reflecting a typical seasonal slowdown during the monsoon season. The month-on-month size of the contraction was similar to recent years.

Strong lube demand throughout most of the year boosted total consumption to 398,320kl in the first seven months of the year.

The volume was up 6pc from 375,750kl the previous year and the highest in at least a decade.

Lube demand got a boost from a strong economic recovery following the gradual relaxation of pandemic-related restrictions.

The economy’s 2.5pc growth rate in the second quarter speeded up from the first three months of the year.

The recovery included a rebound in the tourism sector.

More than 1.12mn international tourists visited Thailand in July, up from less than 20,000 the same month a year earlier and the highest since early 2020.

Thailand’s purchasing managers’ index rose in July to a five-month high amid growing confidence about the outlook.

Consumption of passenger car motor oils (PCMO) rose by 23pc in July from a year earlier to its highest in at least a decade. PCMO consumption is typically more reflective of activity in the services sector.

Demand for heavy-duty engine oils (HDEO) rose by 16pc in July to a three-year high.

Strong domestic lube demand mirrored a similar trend throughout southeast Asia and contrasted with the sharp slowdown in consumption in China.

Rising lube consumption provided a welcome outlet for base oils supplies from Thailand’s base oils producers and from overseas refiners.

Like in other markets, Thai blenders' consumption of premium-grade base oils has risen steadily in recent years.

Even so, base oils from Thailand’s refiners accounted for a growing share of the country’s consumption so far this year.