Brazil’s base oil supply remained tighter than usual in March as production and imports struggled to keep pace with rising demand.
The country’s net supply, or production and imports less lube demand and exports, came to 1,080mᶟ (960t) in March. The volume fell from an already-low 6,970mᶟ the previous month and 16,370mᶟ in January.
The lower volumes cut Brazil’s net supply to 24,430mᶟ in the first three months of the year. The volume was the lowest since the third quarter of 2020. Supply was unusually low at that time because of a sustained drop in the country’s base oils production.
Base oils output has been lower in the first three months of this year than during the final quarter of 2021. But it remained more than 50pc higher than during the third quarter of 2020.
The drop in supplies in recent months instead reflected a combination of lower base oils production and imports and improving lube demand.
The drawdown in supplies has coincided with rising prices and tightening availability of base oils in other key markets like US and Europe.
The tighter supply has curbed those regions’ ability to offer additional spot volumes. Markets like Europe and West Africa are instead seeking additional volumes from the US.
