Japan Demand Fell in November

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Japan Demand Fell in November

Japan’s finished lubricant demand dropped by more than 10% in November, compared to the same month last year, but was up a bit from October, according to a government report. Lubricant imports were lower and exports slightly higher for the month.

The country’s lubricant consumption declined 11% to 110,599 kiloliters, or 99,000 metric tons, in November, down from 124,191 kL in November 2020, the country’s Ministry of Economy, Trade and Industry reported on Dec. 28. That was up though by 3% from 107,057 kL in October. Aside from a 68,909 kL mark in August, the lowest monthly consumption volumes for the year were reported for November and October.

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Japan’s production of lubricants, which includes exports, decreased 3% to 145,128 kL. Sequentially, production was up slightly from 145,046 kL in October. The November lubricant production volume was the third-lowest for a month this year, behind October and May (138,472 kL). The high point this year of 202,110 kL occurred in March.

Imported lubricant volumes were 21,704, a 21% decline from 27,587 kL. This had followed strong increases in imports in October and September, when volumes exceeded 28,000 kL in both months. Export volumes edged up 3% to 53,885 kL in November. Sequentially, this represented a 31% jump from 41,043 kL in October.

The Japan Economic Research Center released on Dec. 27 its updated forecast for the first half of fiscal year 2022. Its fiscal year is from April to March. Although it remained optimistic about the continued rebound of Japan’s economy through the first part of fiscal year 2022, it suggested the economy would likely grow weaker at that point.

In the remaining period of fiscal year 2021, “the recovery of people’s mobility in response to controlling the spread of the delta variant of COVID-19 will help ample household savings to realize consumers’ pent-up demand,” the center said in its forecast. “Government consumption will also increase due to the resumption of people’s hospital visits for ordinary purposes and the third implementation of COVID-19 vaccination. However, supply constraints regarding resources, materials and parts will slow the progress of manufacturing and construction, thereby reducing both public and private capital investments.”

The forecast doesn’t consider the potential negative effects of the omicron COVID-19 variant on the economic climate, explaining that in general, the stronger the infectiousness, the lower the toxicity for a virus. “If it is true of the omicron variant, its spread may not be a serious impediment to the domestic and international economic climate,” the center noted in its forecast. “Otherwise, if the omicron variant involves in a unique manner, its spread will worsen the world economy.”

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