India July Group II base oils imports rise

India’s Group II base oils imports rose in July to their highest this year amid a jump in shipments of light-grade supplies.

Total imports of light and heavy grades came to more than 99,000t in July, provisional customs data showed.

The volume was up from an already high 91,000t the previous month and the highest since December.

The rise in shipments lifted total Group II imports to more than 608,000t in the first seven months of the year. The volume was up 18pc from less than 516,000t during the same period last year.

Group II base oils imports rose even as India’s total base oils imports fell in July. The drop in total supplies reflected the fall in demand for very-light grade base oils.

The divergence in demand partly reflected the different end-user markets for very light grade base oils and for light and heavy grades.

Stronger demand for light and heavy-grade base oils reflected more the impact of India’s sustained rise in lube consumption this year on the back of strong economic growth.

Demand for light and heavy grades is also less impacted by India’s retail diesel prices.

The rise in Group II base oils imports in July coincided with and helped to cover for a drop in domestic base oils production because of plant maintenance work.

It also helped to cushion the impact of a sustained slowdown in Chinese demand for Group II supplies from Asia-Pacific producers.

Chinese demand fell to a level that freed up a growing volume of surplus base oils in China that were cleared through the export market.

India was the destination for a growing share of those supplies, especially of light grades.

More supplies from China began to move to India from the third quarter of last year. At that time, the shipments consisted of Group I base oils.

A growing share of the volumes in recent months has consisted of Group II light grades.