India’s lube demand rose in September for a third month, keeping pressure on the country’s blenders to maintain sufficient base oils stocks to cover the strong domestic consumption.Lube consumption of 397,000 tonnes in September rose from 365,000 tonnes in August and by 4% from year-earlier levels, government data showed..Lube demand could hold firmer over the coming months following the end of the monsoon season and on the back a typical boost in consumption during the festive season.That seasonal boost could get additional support following changes in India’s goods and services tax (GST) that cut the price of major items like passenger cars.A jump in India’s automobile sales in September, and especially during the days after the tax-cut came into effect during the second half of the month, reflected that dynamic.Passenger car sales rose in September for the fifth time in six months and at their fastest rate since March, according to the Federation of Automobile Dealers Associations (FADA).“A wave of new customers entered showrooms and existing ones upgraded to higher variants, taking advantage of lower GST and irresistible festive schemes,” said FADA Vice President Sai Giridhar..Signs of a pick-up in India’s base oils imports in September boosted blenders’ lower stocks, helping to meet the rise in lube consumption.The prospect of lube demand staying at more elevated levels could keep pressure on blenders to maintain high base oil import volumes over the coming months.The expected start-up of new base oils production capacity in India at the end of the fourth quarter could trigger a subsequent slowdown in requirements for supplies from overseas markets.The timing of the start-up of the new unit would be too late to cover for a seasonal rise in India’s lube consumption over the coming weeks.Strong demand for overseas shipments to meet rising domestic lube demand would provide a welcome boon for Asia’s base oils market amid signs of a pick-up in surplus supply..India’s August base oils supply lags demand.Asia’s August lube demand, base oils supply rises.Base Oil News stories and analysis also available on ICIS platform
