India’s base oils supply lagged demand for an eighth month in October in the face of firm lube consumption, an extended dip in base oils output and a drop in imports from the country’s largest overseas supplier.The tighter supply cut blenders' stocks.But the worst of the supply-tightness has now likely passed amid an expected improvement in domestic output and overseas supplies.A recovery in supply raised expectations that base oils prices for overseas shipments would face pressure to adjust as supplies competed for buyers.Such a scenario incentivized buyers to procure sufficient volumes to cover requirements rather than begin a more extensive round of stock replenishment.Supply stayed lower as domestic base oils output of 90,000 tonnes in October held below the 100,000 tonnes level for the third time in four months, government data showed.Before July, India’s base oils output had fallen below that level just once in the previous nine months.Output dipped from July because of plant maintenance work.The drop in output contrasted with an expected rise in base oils production in the coming year as new production capacity starts to come online.The drop in output also contrasted with a sustained rise in India’s lube demand in six of the last seven months to October from year-earlier levels.The disconnect between output and consumption left Indian buyers more reliant on imports.That reliance raised concern about even tighter supply during the shutdown of a key Group II base oils unit in South Korea throughout second-half September and October.India’s base oils supply, or domestic output and imports combined, duly fell to less than 400,000 tonnes in October for the third time in four months.The lower volume contrasted with supply that averaged 460,000 tonnes/month during the second quarter of the year.India’s demand, or domestic consumption and exports combined, held firmer at close to 430,000 tonnes in October. The last time demand fell below the 400,000 tonne/month level was in February.The prospect of demand continuing to trend higher highlighted the need for the start-up of additional base oils production capacity in India to plug the shortfall..India’s October lube demand rises.India’s October base oils imports mixed.S Korea’s Sept base oils output falls
