Argentina’s lube demand fell in November for a second month just as more base oils arbitrage shipments reached the country, adding to supply.
Any significant rise in surplus supplies was unlikely in view of a halt in arbitrage shipments from Asia-Pacific from the start of the fourth quarter of last year.
Weaker lube demand added to the risk of seeking to line up additional arbitrage shipments to Argentina from other markets such as Europe or the Mideast Gulf.
It instead boosted the attraction for blenders to trim feedstock inventories and to procure smaller volumes more regularly and with a faster delivery time.
The slowdown in demand was also relatively muted.
Argentina’s lube consumption of 22,470mᶟ (19,900t) in November fell by 4pc from 23,660mᶟ during the same period a year earlier, government data showed.
The pace of the contraction slowed from a 10pc fall in October.
Demand rose by 18pc from October to levels that were similar to typical consumption of around 22,210 mᶟ/month over the past year.
Steady demand coincided with an increasingly muted contraction in Brazil’s lube demand in October and November. Brazil’s consumption then rose in December.
Argentina’s lube demand held relatively firm in 2022 amid stronger-than-expected economic growth in the first nine months of the year.
But growth slowed in the final quarter of the year amid weakening activity in everything from mining to manufacturing and agriculture.
The country’s automobile sales extended their rise in December for a tenth month. But the 2pc increase was the smallest since February 2022.
Automobile production fell in December for the first time in eleven months.
The slowdown in lube consumption mostly reflected a slump in demand for industrial oils. Consumption fell by 10pc in November after dropping at a similar pace in October.
Automobile lube consumption was steadier, with demand dipping by less than 1pc.
Firmer passenger-car motor oils consumption mirrored a similar trend in Brazil and in other markets like Europe and southeast Asia.
The trend highlighted how the slowdown in economic growth in those markets impacted the industrial sector more than demand in the services sector.