India’s base oils supply lagged demand in December even as the country’s domestic production climbed to an eighteen-month high.The supply shortfall preceded a seasonal rise in demand early this year, raising the prospect of a pick-up in requirements for overseas supplies.India’s imported base oils cargo prices instead weakened relative to FOB Asia prices in January, complicating the arbitrage to lock in additional shipments.The dynamic suggested that buyers had secured sufficient supplies from other sources or that demand was lower than expected.One alternative source was India’s domestic refiners, whose output extended a sharp rebound at the end of last year.Base oils production of 129,000 tonnes in December rose from 123,000 tonnes the previous month and by 13% from year-earlier levels, government data showed.The volume was the highest since mid-2023 and followed a dip in output in the four months to October.The rise in output could reflect early signs of an increase in India’s base oils production capacity.Some additional capacity was added in the middle of last year, with the impact expected to be felt early this year following an increase in refinery run-rates.More new production capacity is set to be brought online this year.Higher base oils output in December contrasted with and cushioned the impact of a drop in India’s base oils imports that month.A larger-than-usual portion of the imports consisted of very-light grade base oils, with shipments of other grades falling to a twenty-one month low.Base oils supply, or domestic output and imports combined, duly fell back to around 430,000 tonnes in December, from close to 450,000 tonnes the previous month.Lower supply contrasted with a rise in India’s demand, or domestic consumption and exports combined, to 490,000 tonnes in December.Demand climbed to a six-month high amid a sustained rise in the country’s domestic lube consumption. Supply duly flipped back to a shortfall in December for the ninth time in ten months..India’s December base oils imports slip .India’s Dec lube demand extends rise
India’s base oils supply lagged demand in December even as the country’s domestic production climbed to an eighteen-month high.The supply shortfall preceded a seasonal rise in demand early this year, raising the prospect of a pick-up in requirements for overseas supplies.India’s imported base oils cargo prices instead weakened relative to FOB Asia prices in January, complicating the arbitrage to lock in additional shipments.The dynamic suggested that buyers had secured sufficient supplies from other sources or that demand was lower than expected.One alternative source was India’s domestic refiners, whose output extended a sharp rebound at the end of last year.Base oils production of 129,000 tonnes in December rose from 123,000 tonnes the previous month and by 13% from year-earlier levels, government data showed.The volume was the highest since mid-2023 and followed a dip in output in the four months to October.The rise in output could reflect early signs of an increase in India’s base oils production capacity.Some additional capacity was added in the middle of last year, with the impact expected to be felt early this year following an increase in refinery run-rates.More new production capacity is set to be brought online this year.Higher base oils output in December contrasted with and cushioned the impact of a drop in India’s base oils imports that month.A larger-than-usual portion of the imports consisted of very-light grade base oils, with shipments of other grades falling to a twenty-one month low.Base oils supply, or domestic output and imports combined, duly fell back to around 430,000 tonnes in December, from close to 450,000 tonnes the previous month.Lower supply contrasted with a rise in India’s demand, or domestic consumption and exports combined, to 490,000 tonnes in December.Demand climbed to a six-month high amid a sustained rise in the country’s domestic lube consumption. Supply duly flipped back to a shortfall in December for the ninth time in ten months..India’s December base oils imports slip .India’s Dec lube demand extends rise
