India’s March base oil imports rebound

India’s base oil imports rose in March to a three-month high on the back of a jump in shipments from South Korea.

Imports rose to more than 438,000t in March, provisional customs data showed. The volume was up from less than 370,000t the previous month and around 260,000t in January.

Imports of 1.06mn in the first quarter of the year fell from 1.27mn t during the last three months of 2021. The volume was the lowest since the second quarter of last year, when availability was unusually tight.

Availability also tightened in the first quarter of this year amid a drop in shipments from South Korea. Base oil exports from the northeast Asian country had fallen steadily since the end of last year.

Unlike the second quarter of last year, buyers in India had also been reluctant to commit to taking supplies that were available at the higher prices that some producers had begun to target at the start of the year. Their health inventory levels curbed any urgency to buy.

They were also able to secure supplies at more competitive prices from other sources like the US. Those shipments then reached India in February and March.

Expectations of that pick-up in shipments in March had prompted some buyers to continue to resist higher prices, even as crude and diesel prices continued to trend higher during the first few weeks of the year.

That resistance waned following the sharp surge in crude prices from second-half February. The higher prices pushed cfr India light-grade prices to a steep discount to regional diesel prices. They also prompted US producers to hold onto more of their supplies.