One of the nations that had been showing steady growth so far was India, with its car industry once among the worlds most promising, buoyed by hopes that an expanding middle-class population would buy vehicles for the first time, the Financial Times reported.

However, car sales in India tumbled more than 40 percent in August, magnifying concerns that months of sharp declines could trigger a full-blown crisis. The auto industrys woes are the most severe symptom of a broader economic slowdown, and have forced automakers to cut production, shut plants temporarily and let go of contract workers.Indias finance minister last month announced a series of initiatives designed to kick-start lending to consumers to encourage new car purchases.

The slump in car sales was also seen in other key economies such as China, where the prolonged United States-China trade dispute and slowing economic growth was affecting most industrial segments. Chinas auto sales dropped 6.3 percent in September from a year earlier and purchases of electric cars tumbled 34.2 percent at a time when the industry is spending heavily to meet government sales quotas for the technology, the Japan Times reported.

Base oil suppliers and end-users efforts to destock ahead of the end of the year were also anticipated to impact lubricant and base oil demand over the next few months. A majority of market participants typically start managing inventories very carefully in October so as to use up existing stocks and avoid tax ramifications once the year finishes.

Importers in China have been cautious about the volumes that they will secure over the next three months as they would like to avoid carrying over inventory into 2020. Furthermore, speculation that freight costs might increase ahead of the IMO 2020 rules implementation are also discouraging transactions that would incur long-haul transportation costs.

Domestic prices in China remained fairly stable, and demand was heard to have shown a small pickup following the Golden Week holidays in early October, but it was still fairly tepid.

Shipments from the Middle East were expected to meet a portion of the demand emerging in China over the next few weeks, with a 6,000 metric ton API Group III cargo heard to have been shipped by Abu Dhabi National Oil Companyfor delivery this week.

There were also several shipments of Group II base oils from Taiwan and South Korea scheduled as usual throughout the month.

Recent base oil increase initiatives in Asia have met with resistance and were only partially implemented, sources said.

There were reports that ExxonMobil has communicated a decrease for some of its grades moving as contract cargoes to China and other destinations as of mid October.

The producer was understood to have lowered the price of its Group I 500SN/600SN and bright stock by U.S. $40 per metric ton. This effectively rescinds the increase the producer had nominated for Oct. 4 implementation.

Meanwhile, it was reported that the producer’s contract prices for Group II cuts would remain unchanged.

In late September,ExxonMobilwas reported to have communicated a price increase of $40/t for contract transactions to China and several other Asian destinations as well, but market fundamentals shifted, with crude oil prices retreating, and support for the increase weakening. Additionally, spot prices for exports in Asia have softened and the producer was hoping to be able to offer competitive numbers, according to sources.

Spot prices were stable to soft this week, reflecting current discussions. Ex-Singapore assessments were revised down to portray the decrease of a major refiner, which effectively withdraws the increase shown last week. Group III values were also adjusted down as oversupply conditions were placing downward pressure on price indications.

Ex-tank Singapore Group I prices for the solvent neutral 150 grade were assessed down by $10/t to $720/t-$740/t, and the SN500 was also down by $10/t at $770/t-$790/t. Bright stock was adjusted down by $10/t to $860/t-$880/t, all ex-tank Singapore, following adjustments by a major refiner.

The Group II 150 neutral was unchanged at $760/t-$780/t, while the 500N was also steady at $770/t-$790/t, ex-tank Singapore.

On an FOB Asia basis, Group I SN150 was holding at $600/t-$620/t, and the SN500 grade was mentioned at $560/t-$580/t. Bright stock was assessed at $740/t-$760/t, FOB Asia.

Group II 150N was heard at $570/t-$590/t FOB Asia, while the 500N and 600N cuts were steady at $580/t-$600/t, FOB Asia.

In the Group III segment, prices continued to be exposed to downward pressure due to plentiful availability. The 4 centiStoke and 6 cSt were assessed down by $10/t at $770-$800/t and $780/t-$825/t, respectively. The 8 cSt grade was also down by $10/t at $690/t-$720/t, FOB Asia for fully approved product.

Upstream, crude oil prices eased on Thursday following industry reports of a larger-than-expected build in crude stocks in the United States. The drop was limited by the comments of U.S. Treasury Secretary Steven Mnuchin about a potential resolution to the U.S.-China trade dispute next month.

On Oct. 17, Brent December futures were trading at $58.99 per barrel on the London-based ICE Futures Europe exchange, compared to $58.37/bbl on Oct. 10.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com.

LubesnGreasesshall not be liable for commercial decisions based on the contents of this report.