India’s base oils supply lagged demand in August for the second time in three months.The shortfall left blenders with lower-than-usual stocks at a time when they typically start to build inventories in preparation for a seasonal rise in demand at the end of the third quarter.Lower stocks and the prospect of firmer demand coincided with and supported firm base oils prices that facilitated a pick-up in shipments to the country in September.The relative price-strength showed signs of extending into the start of the fourth quarter of the year.Supply lagged demand even as India’s base oils output extended its recovery to 127,000 tonnes in August, government data showed..The volume rose from 118,000 tonnes in July to the highest this year.Output had dipped during most of the intervening months because of a protracted round of plant-maintenance work.Output could extend its rise in the fourth quarter, when new premium-grade base oils production capacity is scheduled to come online.But higher output in August was insufficient to balance out a dip in India’s base oils imports to a six-month low..Total supply, or output and imports combined, duly fell to less than 430,000 tonnes in August.The volume fell from more than 500,000 tonnes the previous month to the lowest since February.Lower supply in August contrasted with unusually firm demand at a time of year when India's lube consumption typically slows during the monsoon season.Total demand, or domestic consumption and exports combined, instead held at more than 510,000 tonnes in August and outpaced supply by the second-largest volume in a year.The largest supply-shortfall during that period was in June.The large shortfalls in two of the three months to August left blenders with low stocks.Signs of a strong rebound in base oils imports in September pointed to moves to replenish those stocks.The rise in supplies in recent weeks included a recovery in flows from South Korea and Saudi Arabia, and still-high volumes from the US.India’s imported Group II base oils prices maintained a firm premium to FOB Asia and FOB US export cargo prices even at the end of the third quarter of the year.The firm price-premium pointed to ongoing demand for additional supplies heading into the fourth quarter of the year..India’s August lube demand rises.India’s August base oils imports fall.S Korea's Aug base oils exports to India rise.Base Oil News stories and analysis also available on ICIS platform
