Japan’s base oils and lube demand fell in December for the first time in three months amid signs of a slowdown in economic activity.The simultaneous slump in Japan’s base oils exports left the country’s total demand lagging supply by the largest margin in more than a year. Japan’s base oils and lube stocks rose in response from a more-than-two-year low in November.The trend suggested that Japan’s base oils exports were likely to remain lower even if domestic demand dips as a drop in structural supply kept pressure on the country’s stocks.Base oils and lube consumption of close to 139,000 kilolitres (123,000t) in December fell from more than 158,000kl the previous month and by 4pc from year-earlier levels, government data showed.The inconsistent demand growth throughout the year left Japan’s total consumption of 1.77mn kl in 2023 almost the same as year-earlier levels of 1.75mn kl.Lower base oils and lube demand in December coincided with a drop in Japan’s industrial production for a second month and retail sales that grew at their slowest pace in eighteen months.Japan’s falling passenger-car motor oil (PCMO) consumption mirrored the slowdown in retail sales activity.PCMO consumption fell by 14pc and for a third straight month in November.Consumption of lubricants more closely linked to industrial activity also fell, but at a slower pace. Japan’s total demand, or domestic consumption and exports combined, fell in December to a ten-month low of 173,000kl.The drop in demand helped to halt a slide in the country’s inventories that had fallen every month since April 2023..Japan’s Dec base oils output stays low
