ILMA Compoundings March 2017 - 12

INDUSTRY RUNDOWN

Market Report
The Americas are Embracing Change
By Judith Taylor
The Americas base oil market is continuing to work to
meet the changes fostered by regulations and stipulations
from the Environmental Protection Agency (EPA) that have
dominated the industry for several years.
The base oils and lubricants industry have worked to improve
carbon emissions controls and other key elements of the EPA
stipulations while at the same time fulfilling the need to maintain and improve overall lubricant performance in vehicles.
In 2017, many testing programs and initiatives begun as
many as five years ago are entering the commercial phase,
mainly for lubricants used in passenger cars. There are also
testing programs underway for heavy-duty vehicles, and the
combined work for both vehicle sectors is pushing the base
oil side of the industry toward lighter viscosity, premium
base stocks.
Group II base oils have become the prevalent base oils in
the Americas, surpassing the typically heavier grade Group
I from 2014 and forward. But the evolving needs for higher
performance, lighter viscosity base oils are bringing Group
II+, Group III and polyalphaolefins (PAOs) into the forefront.
Group III and PAOs are being referred to as synthetic
base stocks, and blends of these with Group II are being
referred to as semi-synthetic.
The Group II+ and Group III+ viscosity grades are also
blurring the demarcation lines between the base stock types
in terms of both the iterative differences between the viscosities and the prices.
Globally, base oils are considered in oversupply, with
prices for several grades - especially light grades - nearing
parity conditions in many situations.
The graph on page 13 shows Group II posted prices for a
light, mid, and heavy grade.
Additionally, the lubricant certification system used in
the U.S. is coming under scrutiny from the industry because
these protocols are viewed by many industry participants as
too slow. This was addressed at the 2016 ICIS Pan American

12

MARCH 2017

| COMPOUNDINGS | ILMA.ORG

Base Oils conference by a speaker from additive company
Lubrizol. The speaker pointed out that certification processes begun in 2012 are the ones just emerging into the
commercial sector in 2017. The slow, and costly, process is
considered a blocking point in ushering in new technologies
and lubricant products for the commercial market.
In 2017, the progress toward light-viscosity base oils in
Group II and Group III is going to continue amid expectations that changes wrought by regulatory requirements are
reaching into and impacting the commercial marketplace for
motor oils and lubricants.

Globally base oils are considered in oversupply, with
prices for several grades - especially
light grades - nearing parity conditions in many situations."
While the industry works to embrace regulations and
tackle the environmental stipulations, 2017 has revealed
itself as a year likely to be dominated by a combination of
improving upstream crude oil stability and swirling governmental shifts.
On the government shifts, the 2016 election brought in
changes early in 2017 and expectations of more changes to
come, ranging from economic to environmental. The Brexit
vote in United Kingdom has invoked coming changes for
Europe likely to emerge in 2017.
Europe's base oil production is essentially all Group I,
with several closures taking place during 2016. These closures - and expectations for more to come - have barely
logged in an effect in the global base oil market as Group II


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ILMA Compoundings March 2017

Table of Contents for the Digital Edition of ILMA Compoundings March 2017

LETTER FROM THE CEO
INSIDE ILMA
WHAT’S COMING UP
INDUSTRY RUNDOWN
PROVIDING FOODGRADE LUBRICANTS IN A GLOBAL MARKETPLACE
BIODEGRADABLE LUBRICANTS PRIMER
GROUP I RE-REFINERS DOMINATE ASIA-PACIFIC
BUSINESS HUB
COUNSEL COMPOUND
WASHINGTON LANDSCAPE
IN NETWORK42
PORTRAIT
ILMA Compoundings March 2017 - Cover1
ILMA Compoundings March 2017 - Cover2
ILMA Compoundings March 2017 - 1
ILMA Compoundings March 2017 - 2
ILMA Compoundings March 2017 - LETTER FROM THE CEO
ILMA Compoundings March 2017 - INSIDE ILMA
ILMA Compoundings March 2017 - 5
ILMA Compoundings March 2017 - WHAT’S COMING UP
ILMA Compoundings March 2017 - 7
ILMA Compoundings March 2017 - INDUSTRY RUNDOWN
ILMA Compoundings March 2017 - 9
ILMA Compoundings March 2017 - 10
ILMA Compoundings March 2017 - 11
ILMA Compoundings March 2017 - 12
ILMA Compoundings March 2017 - 13
ILMA Compoundings March 2017 - PROVIDING FOODGRADE LUBRICANTS IN A GLOBAL MARKETPLACE
ILMA Compoundings March 2017 - 15
ILMA Compoundings March 2017 - 16
ILMA Compoundings March 2017 - 17
ILMA Compoundings March 2017 - 18
ILMA Compoundings March 2017 - 19
ILMA Compoundings March 2017 - BIODEGRADABLE LUBRICANTS PRIMER
ILMA Compoundings March 2017 - 21
ILMA Compoundings March 2017 - 22
ILMA Compoundings March 2017 - 23
ILMA Compoundings March 2017 - GROUP I RE-REFINERS DOMINATE ASIA-PACIFIC
ILMA Compoundings March 2017 - 25
ILMA Compoundings March 2017 - 26
ILMA Compoundings March 2017 - 27
ILMA Compoundings March 2017 - BUSINESS HUB
ILMA Compoundings March 2017 - 29
ILMA Compoundings March 2017 - COUNSEL COMPOUND
ILMA Compoundings March 2017 - 31
ILMA Compoundings March 2017 - WASHINGTON LANDSCAPE
ILMA Compoundings March 2017 - 33
ILMA Compoundings March 2017 - IN NETWORK42
ILMA Compoundings March 2017 - 35
ILMA Compoundings March 2017 - 36
ILMA Compoundings March 2017 - 37
ILMA Compoundings March 2017 - 38
ILMA Compoundings March 2017 - 39
ILMA Compoundings March 2017 - PORTRAIT
ILMA Compoundings March 2017 - Cover3
ILMA Compoundings March 2017 - Cover4
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