India’s September lube demand rises

India’s lubricating oil demand rose in September to a six-month high, boosted by a sustained rise in the country’s economic and industrial activity.

Lube consumption of 385,050t in September rose by 13pc from the previous month to its highest since March, government data showed.

Lube demand rose from year-earlier levels for the fourth time in five months.

The trend lifted total consumption to 3.41mn t in the first nine months of the year. The volume was up 5pc from year-earlier levels and a record high for that period.

Rising lube demand mirrored the country’s strong economic growth over the past year.

The strength of that growth lagged expectations amid a sharp slowdown in global economic growth.

The country’s manufacturing purchasing managers’ index fell in September to a three-month low.

But the PMI index pointed to expansion in the manufacturing sector for a 15^th straight month. Business sentiment rose for a third month to its highest in more than seven years.

The optimistic outlook partly reflected signs of easing cost pressures and confidence that manageable inflation will soon trigger a slowdown or pause in rising interest rates.

Strong domestic demand has also helped to counter the headwinds of weaker growth in overseas markets.

Rising automobile sales in September reflected that strong demand. Auto sales are expected to increase even more strongly in October as a wave of festivals boosts consumption.

India’s strong lube demand contrasted with a sustained slowdown in the country’s base oils imports. The slowdown gathered pace in September, with imports dipping to a 27-month low.

Strong domestic base oils production gave blenders the option of covering more of their requirements with those supplies.

The move allowed them to hold off procuring supplies from overseas markets at a time when prices were falling. They preferred to hold back until they were confident that prices had bottomed out.

Even so, strong domestic lube demand and low base oils imports suggested that blenders would soon need to tap overseas markets for more supplies.