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Lubricant basestocks capacity outstrips demand by a wide margin. The situation will get worse as more capacity comes on stream even as lubricant demand stagnates at a global level and declines in many regions. This imbalance between capacity and demand is even worse for high performance GroupII and Group III basestocks, since most of the new capacity addition is for these products. This capacity and demand imbalance is reflected in the relative pricing for basestocks with Group II basestocks having parity with Group I. It is also reflected in the substitution of Group II in traditional Group I applications.
As a result of this market dynamic, there is tremendous pressure on Group I plants to shut down. Indeed, Kline projects a significant reduction in Group I capacity, to reduce the global surplus. It may also be the case that some of the announced capacities do not materialise due to the capacity–demand imbalance.
As a result of the declining Group I capacity, the supply of high viscosity basestocks will fall since the newer Group II/III basestock plants produce very little high viscosity basestocks or not at all. Furthermore, Group I basestocks have higher solubility compared with Group II and Group III. So reducing Group I supply creates a “solubility deficit” that blenders have to address.
Potentially, both of these issues can be addressed by naphthenic basestocks which are available in high viscosity and have high solubility.”
TITLE: Director in the Energy practice of Kline & Company
LIVES IN: Pune, India
BACKGROUND: Milind has more than 15 years of industry work experience in petrochemicals, polymers, lubricants, and other downstream petroleum products. He holds an MBA and bachelor’s degree in Instrumentation Engineering.
The need for lower fuel consumption, increased durability, and lower emissions in passenger cars and heavy-duty vehicles are the main drivers for the continued ongoing shift away from API Group I base oils and towards increased usage of API Group II and III base oils. Automotive oils are getting lighter, especially on the passenger car side, with Japanese OEMs predicting usage of 0W-8 engine oils.
However, for industrial lubricants the situation is different. Most industrial lubricant formulations do not require base oils with a high viscosity index (greater than 120 VI). On the contrary, many industrial formulations value such properties as solvency and heavy viscosity that Group I base oils can bring to the table. In addition, Group I base oil refineries can produce bright stocks that are not produced in typical Group II/III refinery configurations.
This is where specialty oil companies can play an important role – oils such as naphthenics can be blended with Group II base oils to achieve the most desirable properties in industrial lubricant formulations, including greases. Specialist producers are nimble and used to dealing with comparatively small volumes, and they offer a high degree of customisation. Nynas also produces bright stocks which are in a global under-supply situation. The changing base oil landscape will create additional opportunities for specialty naphthenic refiners worldwide.”
TITLE: President, Geeta Agashe & Associates, LLC
LIVES IN: Cedar Grove, NJ, USA
BACKGROUND: Globally renowned expert in the entire finished lubricants value chain. A holder of two MBAs, Geeta was formerly head of the Global Energy Practice at Kline & Company.
Nynas operates in a globalised market that is facing new challenges. Through our strong focus on sustainability and adherence to the EU’s REACH legislation, we are able to deliver products of the same high quality anywhere in the world. Environmental issues are high on our agenda and we aim to offer high performance products that will have minimum impact on the environment. We are committed to a sustained reduction of our carbon footprint, and we want to enable our customers to achieve the same green objective.
In order to meet these challenges, we are engaged in an intense and continuous collaboration with our customers, both in terms of the development of new products and in terms of the logistics involved in the delivery of these. For many of our customers we function as an external R&D agent, offering technical support that is readily available on a daily basis. Our popular seminars and presentations provide non- exclusive, open access to information and research data, and represent a unique approach among oil producers. Our highly qualified experts and scientists are approachable and always on hand to share their knowledge and experience.
At Nynas, we are able to increase the competitiveness and revenues of our customers through offering this long-standing and continuous support, and a comprehensive, yet targeted, portfolio of specialised products of high viscosity and high solubility”
TITLE: Senior Technical Advisor and Group specialist at Technical Development and Market Support, Nynas Naphthenics
LIVES IN: Gothenburg, Sweden
BACKGROUND: A chemical engineer and Licentiate from Chalmers University of Technology, Mehdi joined Nynas in 2008, and has been the driving force behind the company’s experimental grease lab.
In the manufacture of grease, naphthenic base oils in most cases have great advantages compared with paraffinic oils. This is a generally recognised fact in many parts of the world. The basis for these advantages lies in the favourable solubility properties of naphthenic oils. Read more about Naphthenic oils advantageous in grease making
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