India’s imports of very light grades fall

India’s imports of very light-grade base oils fell in May to a four-month low amid a slowdown in shipments from South Korea and US.

Imports of little more than 149,000t of very light-grade base oils in May fell from more than 160,000t in April and from more than 240,000t the month before that, provisional customs data showed.

The volume was also far below average levels of more than 230,000 t/month during second-half 2021.

The slide in supplies has coincided with a sharp rise in overseas prices for light-grade base oils in recent months. The higher prices contrasted with relatively steadier retail diesel prices in India’s domestic market.

The premium of diesel prices to imported light-grade base oil prices has narrowed sharply in response.

Domestic demand for very light grades has typically risen when the diesel premium to light grades was wider, as it was during second-half 2021.

Demand has fallen when the premium to light grades was narrower, as it has been in recent months.

The fall in shipments of very light grades in May mostly reflected a drop in supplies from South Korea and the US.

The drop in supplies from South Korea coincided with plant maintenance in that country.

The drop in supplies from the US followed the closure of the arbitrage to move light-grade base oils to India.

Weaker domestic demand has countered the impact of that drop in supplies.