India’s base oils imports fell to a four-month low in July amid a dip in shipments from South Korea and the US.Total imports fell to less than 300,000 tonnes in July, from close to 305,000 tonnes the previous month, provisional customs data showed.The shipment volumes fell from imports of close to 350,000 tonnes in April and around 390,000 tonnes in May.The rise in shipments in April and May coincided with and helped to cover strong lube consumption in India in the second quarter of the year.The drop in imports in July coincided with a seasonal slowdown in demand during the monsoon season.It also coincided with scheduled plant maintenance-work in India in the month of July.The combination of lower imports and a drop in domestic base oils output raised the prospect of keeping India’s supply lower for longer.India’s base oils supply already lagged demand in June for a fourth month.The trend showed signs of continuing, with the country’s lube demand holding relatively firm in July.The drop in base oils imports in July partly reflected a closed arbitrage from the US, where tighter supply supported a rebound in prices in that market in the second quarter of the year.Base oils imports of less than 5,000 tonnes from the US in July fell from more than 24,000 tonnes in each of the previous two months to a four-year low.The arbitrage to move shipments from Asia to India also got harder to work after the gap between CFR India base oils prices and FOB NE Asia prices narrowed sharply in April and May.The gap began to widen in June but remained narrower than in the first quarter of the year. The dynamic boosted the attraction for regional refiners to target other markets like southeast Asia.India’s base oils imports from South Korea duly fell in July to a nine-month low.South Korea’s base oils exports to southeast Asia by contrast surged in July to a twenty-two-month high.India’s base oils imports instead got support from a pick-up in shipments from Saudi Arabia and firm volumes from Singapore.Both markets are logistically closer to India compared with South Korea and the US.The shorter time period between procurement and delivery of the supplies reduced the risk of exposure to price volatility at a time of year when Asia’s base oils prices have often fallen sharply..S Korea July base oils exports stay lower.US’ June base oils/lube exports rise.India’s July lube demand holds firm
