India’s base oils supply lagged demand in March for the first time in six months even with a pick-up in domestic production.The higher supply was still lower than usual and contrasted with a sharp rise in demand on the back of a seasonal surge in domestic lube consumption.The subsequent supply shortfall cut blenders’ inventories and triggered a pick-up in buying interest for replenishment supplies.Base oils production of 111,000 tonnes in March recovered from a nineteen-month low of 88,000 tonnes the previous month, government data showed.The rise in production lifted India’s total base oils supply, or output and imports combined, to more than 395,000 tonnes in March, from close to 380,000 tonnes the previous month.The volume was still lower than usual.Before February, supply had exceeded the 400,000 tonnes/month level for four months in a row.The low volume contrasted with a surge in India’s base oils and lube demand, or domestic consumption and exports combined, to a one-year high of more than 455,000 tonnes in March.The subsequent supply shortfall of close to 60,000 tonnes was the largest in fourteen months.India’s firm Group II base oils prices in February and March coincided with buyers’ subsequent moves to replenish lower stocks.The premium of CFR India Group II prices over US prices stayed unusually wide through most of February and March 2024, keeping open the arbitrage to move more US supplies to India.The premium of India Group II prices to Asia prices also held firmer in March 2024.A rise in shipments to India from key sources like South Korea in March likely boosted buyers’ inventories at the start of the second quarter of the year.A steady flow of arbitrage cargoes from the US also moved to India.Higher inventories and demand reverting to more typical levels in the second quarter of the year raised the prospect of curbing buyers’ subsequent urgency to secure additional supplies..India’s March lube demand mixed.India March base oil imports edge lower
India’s base oils supply lagged demand in March for the first time in six months even with a pick-up in domestic production.The higher supply was still lower than usual and contrasted with a sharp rise in demand on the back of a seasonal surge in domestic lube consumption.The subsequent supply shortfall cut blenders’ inventories and triggered a pick-up in buying interest for replenishment supplies.Base oils production of 111,000 tonnes in March recovered from a nineteen-month low of 88,000 tonnes the previous month, government data showed.The rise in production lifted India’s total base oils supply, or output and imports combined, to more than 395,000 tonnes in March, from close to 380,000 tonnes the previous month.The volume was still lower than usual.Before February, supply had exceeded the 400,000 tonnes/month level for four months in a row.The low volume contrasted with a surge in India’s base oils and lube demand, or domestic consumption and exports combined, to a one-year high of more than 455,000 tonnes in March.The subsequent supply shortfall of close to 60,000 tonnes was the largest in fourteen months.India’s firm Group II base oils prices in February and March coincided with buyers’ subsequent moves to replenish lower stocks.The premium of CFR India Group II prices over US prices stayed unusually wide through most of February and March 2024, keeping open the arbitrage to move more US supplies to India.The premium of India Group II prices to Asia prices also held firmer in March 2024.A rise in shipments to India from key sources like South Korea in March likely boosted buyers’ inventories at the start of the second quarter of the year.A steady flow of arbitrage cargoes from the US also moved to India.Higher inventories and demand reverting to more typical levels in the second quarter of the year raised the prospect of curbing buyers’ subsequent urgency to secure additional supplies..India’s March lube demand mixed.India March base oil imports edge lower
