India’s October base oils imports mixed

India’s base oils imports fell in October from the previous month amid a dip in shipments from South Korea.

Imports were still the second highest in five months amid a pick-up in flows from the Middle East especially.

India’s base oils supply faced the prospect of a further squeeze at the start of the fourth quarter as an expected drop in imports coincided with a seasonal rise in lube demand.

The smaller-than-expected fall in imports in October eased those concerns.

Total base oils imports of more than 300,000 tonnes in October fell from more than 340,000 tonnes the previous month, provisional customs data showed.

The September volume was the highest in four months.

It included a surge in shipments from South Korea ahead of maintenance work at a key Group II base oils unit in the country starting that month.

The plant shutdown raised expectations of a subsequent fall in shipments from South Korea at the start of the fourth quarter of the year.

The additional shipments from South Korea in September helped to partially cover for that drop in supplies.

India's base oils imports of around 130,000 tonnes from South Korea in October duly fell from more than 170,000 tonnes the previous month.

The fall in shipments was steep compared with September.

But the volume was similar to typical monthly import volumes during the first eight months of the year.

The smaller-than-expected drop in imports from South Korea coincided with a rise in shipments from the Middle East to more than 85,000 tonnes in October.

The volume rose from less than 65,000 tonnes in September to the highest in more than two years amid a jump in shipments from Saudi Arabia, UAE and Iraq.

Imports also rose from US and Sweden. All the supplies consisted of naphthenic base oils.

The lack of any paraffinic base oils shipments from the US highlighted the still-hard-to-work arbitrage from that market to India at the end of the third quarter of the year.

A steady fall in US Group II base oils prices over the last two months has begun to make that arbitrage more feasible.