India’s Dec lube demand extends rise

India’s lube demand rose for a fifth month in December, sustaining the country’s requirements for large volumes of base oils supplies.

Lube consumption of 390,000 tonnes in December rose by 16% from year-earlier levels to the highest since last June, government data showed.

The rise in consumption lifted India’s total lube demand to 4.50 million tonnes in 2024.

The volume was up 9% from 4.14 million tonnes the previous year.

The rise in demand contrasted with weak or shrinking lube consumption in many other major markets.

The disconnect increased the importance of India as a key outlet for base oils supplies from overseas markets.

The ongoing rise in India’s lube consumption sustained firm demand for base oils supplies from those markets, even with a recovery in the country’s domestic output from late last year.

Any slowdown in India’s lube demand or consumption growth would by contrast impact requirements for base oils supplies from overseas markets.

A slowdown in the pace of the country’s economic growth in the fiscal year ending March raised the prospect of such a scenario over the coming year.

The planned rise in India’s base oils production capacity and output this year would compound any such drop in requirements for base oils supplies from overseas markets.

Any such outcome was unlikely in the immediate term as blenders prepared for a seasonal pick-up in lube consumption at the end of the first quarter of the year.

Even so, a recovery in domestic base oils supply and uncertainty about lube demand-growth over the coming months boosted the incentive for blenders to limit any build-up of surplus supplies, especially from the second quarter of the year.