Thailand’s September lube demand falls

Thailand’s lube demand fell in September for the first time in seven months, coinciding with signs of slower economic growth.

Heavier-than-usual rainfall in September also dampened activity.

Lube consumption of 42,680 kilolitres (37,810t) in September fell from 47,630kl the previous month to the lowest since May 2020, government data showed.

The 2pc contraction from year-earlier levels was the first such slowdown since February.

Thailand’s lube demand had risen strongly in the intervening months amid a strong economic recovery following the relaxation of pandemic-related restrictions earlier in the year.

The pace of that growth began to show signs of slowing during the third quarter of the year and the start of the fourth quarter.

Thailand’s industrial production rose in September at its slowest pace in four months. Automobile sales rose in September at their slowest pace in three months.

Thailand’s purchasing manufacturers’ index for October showed continued expansion for a tenth month. But it fell to its lowest level in four months amid a sharp slowdown in new orders and still-high input costs.

Thailand’s heavy-duty engine oil (HDEO) consumption fell by 2pc in September to an 11-month low. HDEO is considered a bellwether for the state of industrial activity.

Passenger car engine oil (PCMO) sales fell by 4pc in September to their lowest since April.

An extension of the slowdown in Thailand’s lube consumption into the fourth quarter of the year would complicate regional base oil producers’ supply plans.

Strong lube demand in southeast Asia this year helped to partially balance out unusually weak lube consumption in China. The trend prompted a rise in base oils shipments to the region.

A slowdown in lube consumption in southeast Asia would cut demand for those supplies.

Slower demand in Thailand would also free up more domestic base oils supplies for export to overseas markets.

Thailand’s base oils exports surged in September to their highest in a year, while base oils imports fell.