India’s Dec Group III imports mixed

India’s imports of Group III 4cst base oils held steady in December for a third month even as the country’s total imports tumbled.

Imports held firm despite high prices for Group III 4cst base oils, especially compared with falling prices for Group I and Group II base oils.

The contrast reflected firm demand for Group III 4cst supplies at a time when India’s car sales continued to rise strongly.

A large portion of the supplies also consisted of regular term shipments rather than spot volumes.

The firm demand and more fixed supply helped to bypass the volatility of Group I and Group II base oils demand and imports. It also pointed to a continuation of steady flows over the coming months.

Total Group III 4cst and 8cst base oils imports of more than 15,000t in December fell from around 29,000t the previous month, provisional customs data showed.

The volume was the lowest in more than two years.

Imports of Group III 8cst base oils accounted for all the drop in supplies.

These slumped to less than 5,000t in December, from typical levels of closer to 19,000 t/month over the previous year.

A large share of India’s 8cst imports consist of spot rather than term volumes. The country has typically been a useful outlet to clear surplus supplies of the product.

The slump in imports mirrored a similar fall in India's shipments of Group I and Group II base oils.

A sustained fall in prices for those other grades deterred buyers from seeking more spot volumes because of concern about exposure to even lower prices.

Demand for Group III base oils to produce high-end engine oils is focused more on 4cst supplies rather than 8cst base oils.

Imports of Group III 4cst base oils held at more than 10,500t in December, up from around 10,200t the previous month.

The firmer volumes boosted India’s total imports of 4cst base oils to more than 121,500t in 2022. The volume was up 36pc from less than 90,000t the previous year.

Imports of Group III 8cst base oils by contrast fell back to little more than 207,000t in 2022, down 9pc from more than 227,000t in 2021.