India’s May lube demand eases

India’s lubricating oil demand fell in May to a 10-month low amid a seasonal slowdown in activity at the start of the new financial year.

But lube consumption remained unusually firm for the time of year.

Lube demand of 352,000t in May fell by 2pc from a revised 357,000t in April. But it rose by 10pc from year-earlier levels.

Consumption of 708,000t in April and May combined was up 4pc from year-earlier levels and the highest in eight years for that period. The period reflected the first two months of India’s financial year.

The strong lube consumption has coincided with India’s reviving economic activity following Covid-19-related disruptions at various times during the past two years.

The country’s car and tractor sales rose strongly in May versus the same month during the last two years, and versus May 2019 before any Covid-related disruptions.

Sales of two-wheelers and commercial vehicles continued to lag the 2019 levels.

India’s industrial production rose in March for a 13^th straight month. Its purchasing managers index rose in May to the highest in more than a decade.

But the seasonal slowdown in lube consumption compared with the first three months of the year eases blenders’ urgency to procure more base oils at a time when prices for the product are unusually high.

Consumption typically stays at lower levels during the third quarter before a seasonal rise in the fourth quarter of the year.