India’s May base oils output slips

India’s base oils output edged down in May to a six-month low, coinciding with a similar slowdown in the country’s imports of the lubricant feedstock.

Output of 104,000t in May fell from 116,000t the previous month to the lowest since last November, government data showed.

But production in May rose from year-earlier levels for a third month and remained above typical levels of around 101,000 t/month over the past year.

Base oils output edged lower despite firm base oil prices.

The country’s diesel production also slipped in May at a time when the country’s retail diesel prices have lagged the surge in crude prices since late last year. By contrast, fuel oil production rose strongly.

These changes in production can reflect factors like plant maintenance work or moves to respond to different fuel prices to maximise profit.

The lower base oils output coincided with a fall in India’s imports of the lubricant feedstock in May to a four-month low.

But the country’s lube demand also dipped in May to a 10-month low amid a seasonal slowdown in consumption compared with the first few months of the year.

The country’s base oil prices have held relatively steady in recent weeks, suggesting fundamentals remain balanced and buyers are comfortable with their inventories.