India’s August lube demand steadies

India’s lubricating oil demand edged down in August amid a seasonal slowdown in activity.

Lube consumption of 340,000t in July fell from 344,000t the previous month and by 7pc from year-earlier levels, government data showed.

Even with the slowdown, consumption of 3.03mn t in the first eight months of the year was up 6pc from 2.87mn t during the same period last year.

The rise in lube demand mirrored a strong rebound in the country’s economic growth so far this year.

Part of the increase in this year’s lube demand and economic growth reflected a low base level last year when the Covid-19 pandemic slashed economic activity.

The slowdown in lube demand in August similarly partly reflected a higher base level last year following the relaxation of pandemic-related measures.

The slower demand coincided with more mixed signals about end-user demand.

India’s automobile sales rose in August from year-earlier levels. Passenger car sales also rose from August 2019 levels, before the pandemic struck.

An outlier was tractor sales. These fell sharply in August for a second month from year-earlier levels and remained some 7pc below August 2019 levels.

Tractor sales fell even with higher-than-average rainfall during this year’s monsoon season.

But the distribution of the rain has been more mixed, with a deficit in rainfall affecting paddy cultivation in key regions of the country.

Economic signals were also more mixed.

India’s purchasing managers’ index in August held close to its highest in nine months.

At the same time, India’s central bank raised interest rates last month to their highest in almost three years in a bid to control inflationary pressures.

India’s lube demand typically rises from the month of September as the monsoon season draws to a close and a raft of festivals over the coming months boosts economic activity.