Passenger vehicle OEMs were among the first to be affected by chip shortages at the end of last year. Continuous shortages have various impacts on the auto industry as well as the PCMO market. To learn about Kline’s point of view on the extent of the impact on the lubricants market, download the file by clicking the image below.Continue reading
The global passenger car motor oil (PCMO) market is on the cusp of significant change due to many emerging technologies. The growth in electric and plug-in hybrid vehicles has the potential to reduce the consumption of PCMO. As ride sharing becomes more widespread, reliable, and economical, future vehicle owners may decide to forego vehicle ownership. The breakthrough of technological disruptors will result in a realignment of the market’s structure, with implications across the PCMO value chain. Autonomous vehicles still have a long way to go in terms of everyday use, but they may eventually find use in select applications, thereby impacting PCMO consumption.
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The reason for the steady growth of natural gas consumption, and subsequently, its production, can be attributed to multiple factors. In addition to the conditions of the global economy, crude oil prices, ease of installations of clean energy sources, availability of natural gas in regions with high demand, monetization of natural gas, and global trade logistics play a key role in shaping the consumption of natural gas. However, the primary driver for the natural gas market is environmental consideration.
Synthetic lubricants remain the industry’s sweet spot. Estimated to increase at a CAGR of 7.4% between 2020 and 2025, full synthetics are outpacing the overall market growth and making this product segment the focus growth area for most lubricants suppliers. Semi-synthetics are poised to grow at a slower pace, albeit a solid one. The traditional factors including ever-stricter emission regulations, fuel economy requirements, and industry engine oil specifications continue to be key drivers. However, many new developments have been shaping the industry.
Access our recorded session with Kline’s VP of Energy, Yana Wilkinson, who was holding a discussion on how the fast-evolving theme of sustainability is influencing the decarbonization of the lubricants value chain. During this session, Annie Jarquin, Director at Energy practice and the host, selected the most pressing and interesting questions asked during the webinar and discussed them with Yana.Continue reading
The lubricant additives supply chain already faced a trying year in 2020, and 2021 hasn’t started out much better.
Initially, COVID-19 shut down non-essential manufacturing and travel, greatly reducing finished lubricants demand and, consequently, additive demand. This was softened by lubricants marketers continuing to blend finished product and fill their warehouses in the event that their plants were also shut down. helped ease some of the impacts of shutdowns and restrictions faced by additive manufacturers, but it also threw off their forecasting.
Where will the PCMO market be in 2040? We have an idea…
While PCMO demand growth is expected to remain positive in some developing countries, the combined PCMO demand in 15 select countries analyzed in Kline’s PCMO 2040 study shows negative rates over the forecast period. This is directly linked to the increase in EV penetration in the vehicle population. Despite a negative effect on volumetric demand, EVs represent an opportunity to trigger innovation in the next generation of lubricants formulations.Continue reading
Kline Energy Reflections Under a Minute
We may be in the final stages of ICE oil specifications upgrades by industry bodies ILSAC, API, ACEA, and JASO. The recent release of ILSAC GF-6 in 2020 took eight years, and an interim specification of ILSAC GF-5 Plus was needed to be issued to protect engines until GF-6 could be finalized. This was needed as OEMs were concerned that GF-5 lubricants would not protect modern engines.Continue reading
Since the onset of coronavirus in early 2020, the base oil business has been thrown into disarray. While crude oil prices have increased modestly, with Brent around $55/Bbl in February 2020 and now in the low $60 range, base oil prices have mushroomed. In February 2020, European Group I export spot prices were in the low to mid $600/ton range between SN150 and brightstock. Today, solvent neutral cash market prices are double, and brightstocks almost triple, their levels of just a year ago.Continue reading
The global basestock market felt a colossal impact on demand and supply as a result of the COVID-19 outbreak, and brightstocks were no different. Per Kline’s analysis, the brightstock demand declined by approximately 7.5% in 2020 compared to the demand registered in 2019. While the global market was impacted by demand shock during the initial period of COVID-19, the latter phase witnessed supply shock as well, since brightstock supply was in a deficit. This was a result of low basestock production, especially for Group I (including brightstocks), because of unfavorable refinery economics. Due to low fuel demand caused by pandemic-related restrictions, margins for fuel have declined considerably. As a result, refiners are not able to cash in on the current high margin regime for brightstocks, as their run rates are impacted due to constraints on the fuel side of operations.