India’s February base oils imports fall

India’s base oils imports fell to a six-month low in February amid a dip in shipments from South Korea and Saudi Arabia and a slowdown in arbitrage flows from the US.

Imports of less than 295,000 tonnes in February fell from more than 330,000 tonnes the previous month, provisional customs data showed.

The last time imports fell below the 300,000 tonne/month level was in August 2024.

The drop in shipments coincided with plant maintenance work in February, cutting domestic base oils output.

Lower supply preceded an expected seasonal surge in lube consumption in the month of March as blenders sought to maximise sales ahead of the end of the financial year at end-March.

India’s imported base oils cargo prices rose in February on an outright basis and relative to FOB Asia cargo prices.

But their premium to FOB Asia cargo prices stayed unusually narrow, especially for Group II base oils.

The narrow premium complicated the arbitrage to move more supplies from Asia to India despite the country’s tighter supply.

The dynamic suggested that the country’s supplies remained sufficient even with tighter availability from key sources like Saudi Arabia and South Korea at the start of the year.

The flow of arbitrage supplies from the US also slowed sharply in February following the arrival of a wave of shipments the previous month.

A jump in base oils imports from Singapore and the UAE in February partially balanced out the drop in shipments from those other sources.

Imports of more than 50,000 tonnes from Singapore in February were the highest in nine months.

Shipments of more than 30,000 tonnes from the UAE were the second-highest in thirteen months.

The fall in India’s base oils imports in February also reflected more a slump in supplies of very-light grade base oils from markets like South Korea, Spain, and Saudi Arabia.

Imports of other base oils grades were steadier in February and held above 210,000 tonnes for a second month.

Before January, the last time that imports of other base oils grades exceeded that volume was in May 2024.

The firm import volumes, combined with India’s narrow imported cargo premium to FOB Asia prices, added to signs of sufficient supply.