India’s October base oil imports edge up

India’s base oils imports rose in October to a three-month high at a time of year when lube demand got a seasonal boost from a raft of festivals in the country.

The import volume was still the third lowest in more than two years and the lowest for the month of October in three years.

The muted rise in imports partly reflected buyers’ preference to hold back until they were comfortable that the recent fall in base oils prices had bottomed out.

Some buyers covered more of their requirements with supplies from domestic sources at competitive prices.

Even with volumes from domestic sources, the country’s supply increasingly lagged its lube demand.

Base oils imports of more than 280,000t in October rose from around 244,000t the previous month to the highest since July, provisional customs data showed.

Imports fell from year-earlier levels for the sixth time in seven months, cutting total shipments to 3.21mn t in the first 10 months of the year.

The volume was down 15pc from 3.79mn t during the same period last year.

India’s base oils imports extended their slowdown even as the country’s lube demand rose in October to a seven-month high.

Lube consumption got support this year from strong economic growth, including a rebound in automobile sales.

India’s base oils imports would have been even lower if not for a sustained rise in shipments from Taiwan in recent months.

Imports from Taiwan held above 20,000t in October for a fourth straight month.

The high volumes reflected the impact of unusually weak Chinese demand and Taiwan’s need to find alternative outlets for its supplies.

The volumes faced the prospect of slowing if Chinese demand revives. Demand showed some signs in recent weeks of doing just that.

India’s base oils shipments from South Korea by contrast remained unusually low in October and accounted for a dwindling share of the country’s total imports.

The trend reflected a sustained slowdown in South Korea’s base oils exports this year as refiners focused on maximizing diesel output.

Higher domestic base oils output would help to balance out India’s low import volumes and firm lube demand.

But output has already risen this year, leaving limited room for a further increase in production.

The trend suggested a need to boost import volumes over the coming months.