India’s base oils imports climbed to a one-year high in May, boosted by a rise in shipments from the Middle East, firm volumes from key suppliers in Asia and an ongoing flow of arbitrage supplies from the US.The rise in shipments helped to cover for a round of plant-maintenance in India in the second quarter of the year.India’s imported cargo base oils prices held firm relative to prices in Asia and US throughout the second quarter even with the rise in shipments and slowdown in domestic lube consumption.The firm prices pointed to ongoing buying interest that could trigger a rise in surplus supplies over the coming months.The firm prices could also point to tight availability of certain base oils grades.India’s total base oils imports of more than 372,000 tonnes in May held above the 350,000-tonne level for a third straight month, provisional customs data showed..The last time imports stayed so high for an extended period like that was in late-2021.The high import volumes at that time preceded a seasonal rise in demand in the first quarter of 2022.The high import volumes in recent months mostly coincided with a seasonal slowdown in demand during the second quarter of the year.A drop in lube consumption from year-earlier levels compounded the slowdown.The high import volumes also cushioned the impact of an extended round of plant-maintenance work in India that began early this year and extended through the second quarter of the year.The high imports included a large volume of very-light-grade base oils.Demand for these supplies typically rises when India’s domestic diesel prices strengthen relative to imported Group II very-light-grade cargo prices.The domestic diesel premium to CFR India N70 cargo prices rose in May to the widest level in five months and close to the widest since second-half 2022.India’s May imports also included a steady flow of arbitrage supplies from the US. These consisted of mid-viscosity and heavy-grade base oils.The steady imports of heavier-grade supplies from the US every month this year reflected an arbitrage that stayed open for longer than usual and that helped to clear surplus volumes from the US..India’s May lube demand falls.US’ April base oils/lube exports fall.India's April base oils supply exceeds demand
