The increase of high-performing, cost competitive green base-oils, in the context of government regulations, supported by industry interest to develop innovative green formulations for various end users, is driving the bio-lubricants market growth. According to our recently published Opportunities in Bio-lubricants: Global Market Analysis study the outlook illustrates bio-lubricant growth will outpace that of finished lubricants. Bio-lubricants constitute a small percentage of the finished lubricants market globally. The United States is the largest consumer of bio-lubricants in the world, followed by Germany, Nordic countries, and Brazil close behind. China is the smallest, but also the fastest growing market researched in this study.
The reasons for the relatively limited uptake of bio-lubricants include lack of regulation and domestic labels, high-performing formulations that are up to par with conventional lubricants, high prices, and lack of suitable additives.
The most significant regulation passed to date is the Vessel General Permit, introduced by the U.S. Environmental Protection Agency. The VGP is expected to drive the demand for bio-lubricants, particularly in stern tube oils. Advancements in bio-lubricants industry are most prominent in environmentally-sensitive zones, led by federal procurement programs, tenders and self regulation by OEMs and trade associations, such as forestry and waterway associations.Continue reading
In January, Kline & Company, a worldwide consulting and research firm serving needs of organizations in the lubricants and base stocks industry, 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 typical VGO-based virgin base stock plants and RFO-based re-refineries. A more detailed description of the Margin Index can be found in the January release. Continue reading
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 to 10 years, impacting the type of fuels that are consumed, engine technology, and emission control devices. As a result, the market is expected to continue its shift towards the use of multiple BN (alkaline) cylinder oils suitable for a specific application. Asia, with a 53% share of the marine lubricant demand, is the largest consuming region, followed by Europe (includes Western and Eastern Europe, Russia, and Turkey) with 22%, and North America with 17% of the demand. The overall market is not expected to grow substantially; however, the Asian demand share is expected to expand further due to the growth of economies in the region spurred alongside increases in their seaborne trade, and consequently leading to amplified lubricant consumption.Continue reading
Due to the profound changes sweeping the global base oil market Kline & Company announced today the publication of the monthly Kline Base Stock Margin Index. The index simulates cash margins of typical U.S. base oil producers over the past two years.
The index estimates typical cash margin contributions associated with U.S. Group II base stock production, from both VGO-based virgin base stock plants and Recovered Fuel Oil (RFO)-based re-refineries, simulating EBITDA before the deduction of corporate SG&A expenses. A rolling 24-month index will be published monthly, and is available to Kline’s clients, as well as to petroleum and lubricants industry media. The index will be updated monthly and released to our clients and media contacts.Continue reading
Historically, the U.S. East Coast (Atlantic region), led by New York, dominated trading activities with other nations. This makes sense as most of the trade those days was between Europe and the United States. With the emergence of the Asia-Pacific region (first with Japan and now China and the East Asian Tigers) the U.S. West Coast (Pacific region), led by Los Angeles and Long Beach, grew in importance. 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.Continue reading
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 duty motor oils (HDMO) due to their high sulfur content, high volatility, poor low temperature properties, and low viscosity index. At the same time, the supply of high performance Group II and Group III basestocks has exploded over the last ten years and more new supply is in the pipeline. Continue reading
Changes in lubricant refining technology have led to a decline in the supply for petroleum wax, which has traditionally dominated the global wax industry. As petroleum waxes fall behind, new formulations have emerged to compete for the vacated market space. Global wax supply in 2010 is estimated atContinue reading