India’s base oils supply shortfall to demand improved in September to its narrowest level in four months, facilitating blenders’ moves to replenish stocks ahead of a seasonal pick-up in consumption.Supply still lagged demand for a seventh month partly because of a fall in India’s base oils production in September.The shortfall limited blenders’ ability to lock in additional supplies ahead of an expected fall in base oils imports at the start of the fourth quarter because of plant maintenance work in South Korea.India's base oils output of 89,000 tonnes in September fell from 106,000 tonnes the previous month, government data showed.The August volume recovered from a fall in output to a three-year low of 75,000 tonnes in July, when plant maintenance work impacted production.The fall in output in September pointed to additional, unexpected production issues.The lower output partially reversed the boost to supply from the rebound in India’s base oils imports to a four-month high in September.Total supply, or output and imports combined, still rose to a four-month high of more than 430,000 tonnes in September.India’s demand, or domestic consumption and exports combined, fell back to less than 460,000 tonnes in September, from 480,000 tonnes the previous month.The volume still held above the 450,000-tonne level for a sixth month so far this year. It exceeded that level once throughout all of 2023.The shortfall of supply to demand duly narrowed to less than 30,000 tonnes in September, from more than 100,000 tonnes the previous month.The persistent supply shortfall complicated blenders’ ability to build larger stocks in preparation for a seasonal rise in demand in the fourth quarter as well as a likely dip in supply from South Korea.India’s imported cargo prices for Group II heavy-grade base oils flipped to an increasingly wide premium to FOB Asia cargo prices during the month of October.The imported cargo price premium for light grades held close to a six-month high.The firm price premiums contrasted with a narrowing premium for domestic Chinese Group II prices over FOB Asia cargo prices in October.The diverging price dynamics mirrored the signs of firmer supply-demand fundamentals in the India market and more muted fundamentals in China..India’s September base oils imports rise.India’s September lube demand rises
