Thailand’s October lube demand falls

Thailand’s domestic lube consumption fell in October to its lowest in more than two years, adding to signs of slowing economic activity.

Strong lubricants demand in southeast Asia this year had helped to counter unexpectedly weak Chinese lube consumption and attracted a growing volume of base oils shipments to the region.

Slowing lubricants consumption in markets like Thailand raised the prospect of curbing the region’s base oils requirements.

Thailand’s economic slowdown reflected global rather than domestic factors, such as rising interest rates and slowing exports.

Other countries in southeast Asia faced similar pressures, suggesting lube demand may be similarly affected.

Thailand’s lube consumption of 40,940 kilolitres (36,270t) in October fell by 7pc from year-earlier levels to the lowest since April 2020, government data showed.

The contraction contrasted with a rebound in lube consumption for six months to August following the relaxation of pandemic-related restrictions earlier in the year.

The move triggered a surge in economic activity and rebound in tourist arrivals.

The pick-up in tourist arrivals extended into the fourth quarter even as other segments of the economy faced more pressure.  

The ongoing revival of the tourism industry is expected to provide further support to the economy next year.

Strong passenger-car engine oil (PCMO) demand reflected the pick-up in tourism and services activity. PCMO consumption rose in October for the fifth time in six months.

Healthy PCMO demand was the outlier.

Demand for heavy-duty engine oils (HDEO) fell in October for a second month. Demand for other lubricants dipped by 8pc.

HDEO is seen as a bellwether for the state of industrial activity, which slowed in October.

Industrial production unexpectedly contracted in October for the first time in four months. The country’s exports unexpectedly contracted in October for the first time in 20 months.

Slower lube consumption cushioned the impact of a drop in Thailand’s base oils production in October because of maintenance work at the country’s two refineries.