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We at Nynas believe that the changing base oil landscape will increase demand for naphthenics.
Our commitment to naphthenics is perhaps best illustrated by Nynas' takeover of the Harburg refinery in Hamburg, Germany, which the European Commission recently approved. The purchase clearly indicates the company's confidence in a bright future for its naphthenic oil products with our production capacity set to soar by 30 to 40 percent.
The need for lower fuel consumption in passenger cars and heavy-duty vehicles is the main driver for the ongoing shift away from the production of Group I oils in favour of Group II and Group III oils. The latter meet the new demands set for modern engine oils, by far the largest consumer segment that requires base oils.
We see a trend of rationalisation of Group I production capacity, and that decrease opens up the field for naphthenics to thrive. Certain analysts predict that Group I oils will fall to 40 percent of the base oil market by 2020, down from 60 percent just a few years ago.
Even if some specialised Group I producers stay in the market, there will be a global shortage of high viscosity oil products, because Group II and Group III do not result in high viscosity oils. The market is therefore ripe for naphthenic oils that offer this high viscosity.
The need for solvency will also encourage naphthenics market growth. Group II/III oils display a lower solvency compared with Group I oils, but a number of applications need solvency. Naphthenics are there to fill the gap with high viscosity and good solvency, either on their own or in blends with Group II oils.
Valentina Serra-Holm, Marketing Director at Nynas
Södertörn's District Court today approved an extension of Nynas company reorganisation for another three months, until June 15. The reorganisation process will now continue with a focus on actions for removal of US sanctions applicable to the company and to finalise the long-term funding.Read more about Extension of Nynas reorganisation approved
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