Supply falls from high levels in July-Aug even as domestic demand stays strong
Total Q3 base oils supply rises to highest since end-2022
Ongoing demand-strength benefits overseas refiners as production capacity rises
Pakistan’s base oils supply slipped in September after reaching unusually high levels in July and August, even as domestic demand remained firm.
Rising lube consumption suggests the September drop in base oils supply reflected a strategic inventory adjustment following a surge in imports earlier in the summer.
Total base oils supply, including both output and imports, fell to around 30,000 tonnes in September, down from more than 41,000 tonnes during each of the previous two months, customs and industry data showed.
Supply still rose by 35% from a year earlier, marking a third straight month of growth.
The surge lifted total supply to more than 113,000 tonnes in the third quarter of the year.
The volume rose from less than 90,000 tonnes during the previous three months to the highest since late 2022.
An extension of Pakistan’s strong lube consumption would likely support base oils supply at elevated levels.
Such a scenario would be a welcome boon for overseas base oils refiners.
The start-up of new base oils production capacity in markets like Singapore and India adds pressure to find outlets for the rising supplies, underscoring the growing competition in Asia’s base oils market.