Combined Group I/III imports fall to three-month low
Share of total heavy-grade imports falls to lowest since May
Dynamic points to rising role of Group II base oils
India’s imports of Group I heavy neutrals base oils fell to a four-month low in October, while arrivals of Group III 8cSt base oils fell to a three-month low.
Combined, imports of these grades came to around 24,000 tonnes in October.
The volume fell from around or above 30,000 tonnes in each of the previous three months and for the sixth time in seven months from year-earlier levels.
Group II heavy-grade imports surge
The contraction contrasted with a rise in Group II heavy-grade imports to a multi-year high.
The diverging trends cut the combined share of Group I and Group III heavy grades in India’s total heavy-grade imports to the lowest level since May.
Competitive prices
The contrasting trends partly reflected tighter availability of Group I heavy-neutrals at the start of the third quarter, prompting buyers to secure alternative grades.
Competitive Group II base oils prices relative to Group I base oils added to the attraction of substitution.
A narrow gap between Group II heavy-grade and Group III 8cSt prices provided further support.
Displaced supplies
The drop in imports of Group I and Group III heavy grades increased pressure on suppliers to find alternative markets.
Their shrinking share underscored India’s growing demand for Group II supplies to meet its heavy-grade requirements.