India’s lube demand rose to a four-month high in July, complicating blenders’ moves to replenish stocks.Lube consumption came to 403,000 tonnes in July, government data showed..The volume rose by 27% from year-earlier levels to the highest since March, when demand usually gets a seasonal boost at the end of India’s financial year.Rising lube consumption sustained the country’s requirement for growing volumes of base oils from domestic and overseas sources.The prospect of a seasonal pick-up in lube consumption from the end of the third quarter added to those requirements.A protracted round of base oils plant-maintenance in India this year is set to continue with more such maintenance-work in August.The maintenance-work and subsequent cap on domestic base oils output added to the need for additional supplies from overseas markets.Strong demand for overseas shipments sustained the importance of base oils prices that kept open the arbitrage to moves more supplies to India.The premium of India’s imported Group II heavy-grade cargo price over FOB Asia cargo prices held firm in a narrow range since early-April and well above year-earlier levels.The firm premium facilitated the shipment of additional cargoes to India..The country’s steep Group II heavy-grade price-premium to US export prices also sustained a steady flow of arbitrage shipments from that market.Blenders’ moves to maintain sufficient stock levels to meet demand could get more challenging in the coming months.The Israel-Iran conflict in June already complicated their ability to secure sufficient supplies of Group I heavy-grade base oils.It also highlighted the importance of holding additional stocks as a buffer against supply-disruptions.The planned start-up of new base oils production capacity in India in the coming months could conversely boost expectations of steadier supply and cut the need to hold larger stocks.Buyers had to balance that prospect with the possibility of delays to the start-up of the new capacity, as well as any direct or indirect repercussions of higher US tariffs on imports from India..India June base oils supply lags demand.India’s June lube demand stays high.S Korea's June exports to India rise.Base Oil News stories and analysis also available on ICIS platform
