India’s September base oils imports fall

India’s base oils imports slid in September to their lowest in more than two years as buyers waited for prices to stop falling.

Base oils imports of less than 244,000t in September fell from more than 267,000t the previous month, provisional customs data showed.

The volume fell by 42pc from more than 400,000t the same time a year earlier to the lowest since June 2020.

That period in 2020 coincided with nationwide lockdowns to counter the first wave of Covid-19 infections. Buyers slashed their imports at the time as the lockdowns triggered a slump in domestic lube demand.

The current period is different from that time.

India’s economic growth has risen strongly this year. Rising domestic demand has partially countered the impact of a slowdown in economic activity in other key markets.

The country’s automobile sales rose in September for the fifth time in six months. Car and tractor sales exceeded 2019 levels for eight months in a row to September.

Lubricants demand typically gets a further seasonal boost in the fourth quarter of the year during a wave of major festivals.

Blenders usually seek to replenish their inventories at the end of the third quarter ahead of that rise in demand and after the slowdown in activity during the monsoon season.

Buyers held off such moves this time.

Sliding base oils prices everywhere from Asia-Pacific to Europe and US incentivized buyers to hold back. They preferred to wait until they were confident that prices had bottomed out before procuring more supplies.

Signs of surplus availability of supply in all those regions curbed further any urgency to lock in shipments.

Buyers were also able to tap healthy availability from domestic base oils producers.

The ready availability and competitive prices for spot cargoes from sources like Taiwan dampened the attraction of seeking supplies from more distant markets like the US.

Imports of less than 5,000t from the US in September were the second lowest in 27 months. The lowest volume since then had been in August.