India’s lube demand fell in May for a second month, adding to signs of more mixed economic activity in the country.The drop in lube demand cushioned the impact of base oils plant-maintenance work in India during the month.It also contrasted with an extended pick-up in the country’s base oils imports and raised the prospect of base oils supply exceeding demand in May for a second month.India’s imported Group II base oils cargo price premium to FOB Asia prices held unusually firm in May even with the drop in lube demand.The firm price differentials pointed to tight availability of some base oils grades, or other factors supporting ongoing buying interest, or the prospect of a price adjustment in response to softer fundamentals.India’s lube consumption of 365,000 tonnes in May fell by 23% from year-earlier levels, government data showed..The contraction followed an 11% dip in demand in April and was the steepest fall since late-2022.Lower lube demand added to signs of pressure on the pace of India’s economic growth.The drop in consumption coincided with a fall in India’s passenger-vehicle sales in May for the first time in three months, and in commercial-vehicle sales for the third time in four months.India’s central bank cut interest rates in June to the lowest level since August 2022. It cited economic growth that lagged its aspirations for the larger-than-expected cut.Weaker lube demand left blenders’ inventories lasting longer and incentivized them to maintain lower stocks.The prospect of improving base oils availability in Asia, the Middle East and the US in the coming months added to the attraction of maintaining lower stocks.Lower lube demand and high base oils imports in May showed signs of more than countering any drop in domestic base oils production because of plant maintenance work.Any rise in surplus supplies would precede an expected seasonal slowdown in lube consumption during the monsoon season.The weaker fundamentals raised the prospect of putting pressure on base oils prices.India’s imported Group II base oil cargo price-premium to FOB Asia prices instead rose in May to the highest level in around a year..India's April base oils supply exceeds demand.India’s April lube demand falls .India’s April base oils imports rise
