India’s lube demand fell in April for the first time in five months, contrasting with signs of still-firm base oils imports.The dynamic raised the prospect of a rebound in surplus base oils supply in April and in a quarter when lube consumption typically falls from the first three months of the year.Lube consumption of 323,000 tonnes in April fell from close to 460,000 tonnes in March and by 14% from year-earlier levels, government data showed..The contraction from March reflected a typical slowdown in demand at the start of the new financial year.Even so, the 29% fall in demand from March was much steeper than the 10% drop in consumption during the same two-month period last year.The steep drop in demand, combined with signs of high base oils imports in April, curbed the urgency for blenders to seek additional supplies to replenish depleted stocks.The fall in crude oil prices since the start of the second quarter of the year added to the attraction of holding back.India’s imported Group II base oil cargo prices instead rose relative to FOB Asia prices in recent weeks.The firmer price differentials pointed to ongoing buying interest in securing additional volumes despite the weaker demand fundamentals.Ongoing buying interest could reflect moves to cover for a drop in supply from domestic and Middle East refiners because of plant maintenance in April and May.It could reflect moves to build stocks ahead of the monsoon season, when logistics can face weather-related disruptions.It could reflect expectations that the drop in India’s lube demand in April was a correction, and that consumption will continue to trend higher.The country’s automobile sales rose in April for the first time in three months, supporting such expectations.Higher auto sales included a 2% rise in sales of two-wheelers, according to the Federation of Automobile Dealers Associations (FADA).“Dealers reported buoyant enquiry growth in rural areas post-Rabi harvest, driven by strong crop yields, healthy reservoir levels and a favourable monsoon outlook,” FADA President CS Vigneshwar said in a statement..US' March base oils exports stay high.India’s March base oils supply rises.India’s March lube demand rises
