News from Nynas

There is a growing market for specialised oils

H. Ernest Henderson, President K&E Petroleum Consulting, LLC, gives his view on the growing market for specialised oils.

The biggest trend in the global lubricants industry today is the growth of Group II and Group III base stock capacity. This is driven by the automotive industry where the need for high-performance products to meet fuel economy, emissions and durability standards requires premium-quality base stocks like Groups II and III. Recent investments in large-scale plants have created an over-supply of Groups II and III, so we are now seeing a push effect in the formulation of lower-performing products where Groups II and III are being used in the absence of specific performance requirements.

The increase in Group II and III capacity and resultant over-supply has impacted pricing where base stock margins are being continuously squeezed. Over time, the excess capacity and reduced margins will lead to industry rationalisation, especially for Group I production facilities, which have a cost disadvantage compared with Group II and III plants and will struggle to survive during this period.

Many industrial lubricants require heavy-viscosity base stocks including Bright Stock. The transition of the paraffinic pool from Group I to Groups II and III is posing a problem to industrial oil blenders as Group II and III plants do not typically produce heavy-viscosity base stocks, especially Bright Stock.

Blenders are now searching for alternatives for their higher-viscosity industrial formulations. Fortunately, there is a growing market for specialised oils that offer an alternative to heavy Group I base stocks. These specialised oils can even provide improved performance in selected areas that cannot be achieved with Group II, Group III or even Group I. Naphthenic oils are an example of these specialty oils that are beginning to penetrate these niche industrial areas.

The key success factor for any specialised supplier is to offer a cost-effective product with the potential for performance differentiation. If you cannot demonstrate a quantifiable point of differentiation, the market will rapidly revert to one that is simply price-driven. Having a competitive advantage offering is important in an over-supplied market. Nynas has a value offer proposition in that sense and is therefore well equipped to meet the needs of the industrial oil formulator.

Text: Anne Margrethe Mannerfelt

Further reading

Webinar on the benefits of heavy naphthenic oils in industrial lubricants

Discover the versatility of Nynas heavy naphthenic oils in industrial lubricants together with Professor Thomas Norrby.

Read more about Webinar on the benefits of heavy naphthenic oils in industrial lubricants

Platform for sharing experiences within the industrial lubricant sector

In connection with the UNITI Mineral Oil Technology Congress in Stuttgart, Nynas is organising a seminar at which important technical issues relating to industrial lubricants will be discussed.

Read more about Platform for sharing experiences within the industrial lubricant sector

Prominent role for Nynas in London

Dr Valentina Serra-Holm from Nynas will be one of the speakers when the industry meets up to discuss market trends during the ICIS 21th World Base Oils & Lubricants Conference.

Read more about Prominent role for Nynas in London