ILMA Compoundings January 2018 - 17

US DOMESTIC GROUP I & GROUP II BASE OIL PRICES ($/USG)
$3.25
$3.05
$2.85

Exxon GI SN 150 posting ($/USG)
Argus dom GI SN 150 ($/USG)
Motiva GII N100 posting ($/USG)
Argus dom GII N 100 ($/USG)

$2.65
$2.45
$2.25
$2.05
$1.85
$1.65
$1.45
$1.25
Sep
2015

Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov
2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017

US DOMESTIC GROUP I I N100 PREMIUM TO 4-WEEK AVERAGE VGO ($/USG)
$0.90
$0.80
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
0
JAN
2014

JUN
2014

NOV
2014

APR
2015

SEP
2015

FEB
2016

JUL
2016

DEC
2016

MAY
2017

from the second quarter of 2015 to the second quarter of
2017. Mexico's base oils imports have increased substantially,
even as its lubricant demand has declined. This trend is likely
to continue as long as it remains cheaper to import light-grade
base oils than it is to import diesel.
LOOKING FORWARD
Group I supplies are likely to remain balanced through the
first quarter of 2018. HollyFrontier has planned a six-week
maintenance on several units, including the facility's sole
crude unit, to start in February. The Group I producer
worked to build feedstocks and base oils a few months ahead
of the planned maintenance.
TonenGeneral should complete repairs on its Group I plant
in Japan and resume heavy-grade production there by the end
of the first quarter. Regular shipments of Group I supplies
from the U.S. Gulf Coast stopped moving to southeast Asia
after Harvey made landfall. These shipments are unlikely to
resume after the Japanese refinery restarts production.
Group II supplies are likely to remain balanced in the
first quarter of 2018. Some Group II producers that had
storm-related shutdowns are unlikely to have spot supplies

OCT
2017

until sometime in the first quarter. Even though all of the
major U.S. Group II refineries had two shutdowns in 2017,
a couple of virgin base oils refineries are expected to have
planned maintenance sometime this year.
Group III supplies are also likely to remain balanced in
the first few months of 2018.
Unplanned and extended maintenance of Tatneft's Group
III plant in Russia that ran from October to December will
curb availability and limit shipments of unapproved base
oils to the U.S. The lingering Group II light-grade base
oils tightness should also prompt some domestic producers
that have recently converted some of their production to
Group III to instead produce more Group II base oils. Most
semi- and fully approved Group III base oils that move into
the U.S. are term supplies. This balance could turn into
oversupply in 2018, when more unapproved supplies from
the Mideast Gulf move to the U.S. market.
Molina is the editor of Argus Americas Base Oils.
She can be reached at 713-360-7560 or
eva.molina@argusmedia.com.

17



Table of Contents for the Digital Edition of ILMA Compoundings January 2018

Meet ILMA’s New President DAVE CROGHAN
ADDING ANOTHER DIMENSION
THE BIG CHILL
LETTER FROM THE CEO
INSIDE ILMA
Company Callout
WHAT’S COMING UP
INDUSTRY RUNDOWN
In the Know
International Insight
Market Report
BUSINESS HUB
COUNSEL COMPOUND
WASHINGTON LANDSCAPE
IN NETWORK
Member Connections
Cross Connections
PORTRAIT
ILMA Compoundings January 2018 - Cover1
ILMA Compoundings January 2018 - Cover2
ILMA Compoundings January 2018 - 1
ILMA Compoundings January 2018 - 2
ILMA Compoundings January 2018 - LETTER FROM THE CEO
ILMA Compoundings January 2018 - INSIDE ILMA
ILMA Compoundings January 2018 - 5
ILMA Compoundings January 2018 - Company Callout
ILMA Compoundings January 2018 - 7
ILMA Compoundings January 2018 - WHAT’S COMING UP
ILMA Compoundings January 2018 - 9
ILMA Compoundings January 2018 - INDUSTRY RUNDOWN
ILMA Compoundings January 2018 - 11
ILMA Compoundings January 2018 - In the Know
ILMA Compoundings January 2018 - 13
ILMA Compoundings January 2018 - International Insight
ILMA Compoundings January 2018 - 15
ILMA Compoundings January 2018 - Market Report
ILMA Compoundings January 2018 - 17
ILMA Compoundings January 2018 - Meet ILMA’s New President DAVE CROGHAN
ILMA Compoundings January 2018 - 19
ILMA Compoundings January 2018 - 20
ILMA Compoundings January 2018 - 21
ILMA Compoundings January 2018 - 22
ILMA Compoundings January 2018 - 23
ILMA Compoundings January 2018 - ADDING ANOTHER DIMENSION
ILMA Compoundings January 2018 - 25
ILMA Compoundings January 2018 - 26
ILMA Compoundings January 2018 - 27
ILMA Compoundings January 2018 - 28
ILMA Compoundings January 2018 - THE BIG CHILL
ILMA Compoundings January 2018 - 30
ILMA Compoundings January 2018 - 31
ILMA Compoundings January 2018 - 32
ILMA Compoundings January 2018 - 33
ILMA Compoundings January 2018 - BUSINESS HUB
ILMA Compoundings January 2018 - 35
ILMA Compoundings January 2018 - COUNSEL COMPOUND
ILMA Compoundings January 2018 - 37
ILMA Compoundings January 2018 - WASHINGTON LANDSCAPE
ILMA Compoundings January 2018 - 39
ILMA Compoundings January 2018 - Member Connections
ILMA Compoundings January 2018 - 41
ILMA Compoundings January 2018 - Cross Connections
ILMA Compoundings January 2018 - 43
ILMA Compoundings January 2018 - PORTRAIT
ILMA Compoundings January 2018 - Cover3
ILMA Compoundings January 2018 - Cover4
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