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While the global demand for finished lubricants in 2013 is up marginally compared to 2012, the marine lubricants industry is showing signs of improvement and is currently undergoing major changes as it adapts to shifts in the shipping industry. Due to new emission regulations coming to fruition, further modifications will occur in the next five
In January, Kline & Company introduced its monthly Base Stock Margin Index, a characterization of recent cash margin contributions in the U.S. base oil market over the past 24 months. The Index estimates cash margin contributions associated with U.S. Group II base stock production. It simulates EBITDA before the deduction of corporate SG&A expenses for
The economic rollercoaster ride of the past three years has generated a debate on the nature of lubricant demand and its growth in context of economic growth. Does lubricant demand growth track GDP growth rate? Can we define a relation between GDP growth and lubricant growth? Has the lubricant market grown at all in the last 10 to 15 years?
Historically, the U.S. East Coast (Atlantic region), led by New York, dominated trading activities with other nations.
This certainly had an impact on the local economy in terms of growth in related industries such as shipping, trucking, railroad, and other such industries which resulted in the growth of marine engine oils, railroad engine oils, and HDMOs.
We may now see a shift in trade on a similar scale, with the U.S. Gulf Coast, led by Houston, New Orleans, and other ports in the region being the beneficiaries. A potential game changer, as announced by the Wall Street Journal, is the $5.25 billion widening of the Panama Canal scheduled to be completed in 2014. (Read more…)
The dominant trend in the lubricant basestocks industry has been the decline in supply of Group I basestocks due to technical obsolescence as well as over-supply of higher performance Group II and Group III basestocks. Group I basestocks can no longer be used to blend high-performance and mid-tier passenger car motor oils (PCMO) and heavy
Besides Asia, Africa and the Middle East were the only regions which did not stop growing during the recession. Although their economic growth rates did slow down by 2009, they have since started to pick up again. Despite the fact that AME will not see growth rates commensurate to those of the rapidly expanding markets
Of the 63 thousand barrels of lubricant basestocks consumed in the AME region every day, almost 90% are Group I basestocks. The region’s demand for higher performance Group II and III basestocks is small, but growing, especially in the Middle East. This is due to
The finished lubricant markets of Africa and the Middle East are traditionally overshadowed by other markets, more notable for their large size, rapid growth or high quality levels. However, the AME region boasts attractive country markets of its own, with high growth potential and quality lubricant output.
The debut of Gas-to-Liquid base stocks is fast approaching, with the first supply expected from the Pearl project in Qatar next year. Presenting at the ICIS Pan-American Base Oils & Lubricants conference, William Downey, Vice-President of Kline’s Petroleum and Energy Practice, will provide insights on
With continuing technological advances, re-refining of used oil can produce basestocks that are almost on par with conventional virgin basestocks. While from a purely environmental perspective re-refining of used oil is preferable, economic considerations do not
