ILMA Compoundings - April 2019 - 24

INDUSTRY RUNDOWN

Market Report
New Targets
America's base oils challenges
By Judith Taylor
Only four months into 2019, new targets and challenges
for base oils and lubricants have already started to
emerge as environmentalists and marketers push electric
vehicles, and autonomous vehicles and advanced engine
designs for today's vehicles are coming out of factories.
Base oils are the key fluid component of lubricants, and
lubes are the oils that keep engines running. This puts base
oils at the core of these new targets and challenges. Base oils
and the base oil industry are front and center.
According to Lubrizol's Martin Birze, regional business
manager, Passenger Car Motor Oils Americas, speaking at
the 14th ICIS Pan American Base Oils conference, original
equipment manufacturers (OEMs) are taking aim at the fuel
efficiency targets and the carbon emissions challenges set
forth by the U.S. Environmental Protection Agency (EPA).
OEMs are actively working to improve fuel efficiency and
reduce greenhouse gases (GHG). Steps being taken include
engine downsizing, turbocharging, lighter vehicles, variable
valve timing and the introduction of hybrid electric cars into
vehicle fleets.
It is estimated that 75 percent of all engines produced will
be under 2.0 liters by 2023, and half of the new vehicles
produced by 2023 will have boosted air intake.
One example of innovative engineering technology by
OEMs is Mazda's Skyactiv-X engine. This is an original take
on a concept known as homogenous charge combustion ignition (HCCI), according to news releases on the work. It is not
a rotary engine. It is an idea to get a gasoline engine to work
more like a diesel engine, utilizing compressed fuel to ignite
at once instead of fanning away from a spark. Mazada worked
to design a high-compression motor that uses a small spark to
pop just before the fuel would auto-ignite, and this creates the
extra pressure needed to set off the full ignition at the right
time. The engine is also supercharged to give an efficient burn
and is combined with a "mild-hybrid" system that gives the

24

APRIL 2019

| COMPOUNDINGS | ILMA.ORG

powertrain an electric boost under acceleration. Fuel economy
with this engine is improved by about 20 percent compared
to a conventional gas engine of similar displacement.
The Mazda-3 models available with the Skyactiv-X engine
debuted in the Americas at the Los Angeles Auto Show in late
November 2018 to excellent reviews by Automotive News.
Americas' lubricant and additive companies are paying
attention. Across the board, companies are watching for the
underlying elements that foster evolving trends and form the
mega-trends that are setting the pace for changes.
According to key additive producer Infineum, population
growth, urbanization, connectivity and environmental concerns are leading trends that are influencing today's complex
passenger car markets. Statistics from Infineum point to
population growth factors of 7 billion to 9 billion by 2050,
with resources an ongoing issue and geopolitical shifts adding complexity. Additionally, Infineum's statistics show that
66 percent of the population will be in urban centers, where
transportation modes and needs are intense.
Environmental awareness and monitoring also show
potential to increase. Moves toward a "circular economy"
can bring closer attention to non-adherence of policies and a
shift toward more punitive regulations.
While the mega-trends are steaming ahead, forging
everything from new policies to new designs to new types
of lubricants, the Americas base oils market in the first
quarter of 2019 is grappling with normal supply/demand
issues. Oversupply of several base stock viscosities and slow
demand in the fourth quarter of 2018 added to low crude
oil prices to foster a number of posted price changes.
In early October 2018, most U.S. base oil producers reacted
to crude oil prices hitting over $70 per barrel and increased all
viscosity prices by about 20 cents per gallon, with a few higher
or lower than that depending upon the producer and the base
stock grade. This move included Groups I, II and II+. Group II
and III producer Motiva did not change prices at this time.
By mid-November, in response to sinking crude oil prices
and growing supply amid a thinning spot export market,
Group II producer Chevron moved its posted prices down
by 25 cents per gallon. This level of posted price reduction
filtered through the market, as most other producers also
reacted to falling crude oil prices amid the seasonally slower
demand of the fourth quarter. Most Group I, II and II+


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ILMA Compoundings - April 2019

Table of Contents for the Digital Edition of ILMA Compoundings - April 2019

Letter From the President
Letter From the Ceo
Inside Ilma
What’s Coming Up
New Members
Industry Rundown
International Insight
Tackling 303 Thfs
Labeling Conundrum
Business Hub
Counsel Compound
Washington Landscape
In Network
Portrait
ILMA Compoundings - April 2019 - Cover1
ILMA Compoundings - April 2019 - Cover2
ILMA Compoundings - April 2019 - 1
ILMA Compoundings - April 2019 - 2
ILMA Compoundings - April 2019 - Letter From the President
ILMA Compoundings - April 2019 - 4
ILMA Compoundings - April 2019 - Letter From the Ceo
ILMA Compoundings - April 2019 - Inside Ilma
ILMA Compoundings - April 2019 - 7
ILMA Compoundings - April 2019 - 8
ILMA Compoundings - April 2019 - 9
ILMA Compoundings - April 2019 - 10
ILMA Compoundings - April 2019 - 11
ILMA Compoundings - April 2019 - What’s Coming Up
ILMA Compoundings - April 2019 - 13
ILMA Compoundings - April 2019 - 14
ILMA Compoundings - April 2019 - New Members
ILMA Compoundings - April 2019 - Industry Rundown
ILMA Compoundings - April 2019 - 17
ILMA Compoundings - April 2019 - 18
ILMA Compoundings - April 2019 - 19
ILMA Compoundings - April 2019 - International Insight
ILMA Compoundings - April 2019 - 21
ILMA Compoundings - April 2019 - 22
ILMA Compoundings - April 2019 - 23
ILMA Compoundings - April 2019 - 24
ILMA Compoundings - April 2019 - 25
ILMA Compoundings - April 2019 - Tackling 303 Thfs
ILMA Compoundings - April 2019 - 27
ILMA Compoundings - April 2019 - 28
ILMA Compoundings - April 2019 - 29
ILMA Compoundings - April 2019 - 30
ILMA Compoundings - April 2019 - 31
ILMA Compoundings - April 2019 - Labeling Conundrum
ILMA Compoundings - April 2019 - 33
ILMA Compoundings - April 2019 - 34
ILMA Compoundings - April 2019 - 35
ILMA Compoundings - April 2019 - 36
ILMA Compoundings - April 2019 - 37
ILMA Compoundings - April 2019 - Business Hub
ILMA Compoundings - April 2019 - 39
ILMA Compoundings - April 2019 - 40
ILMA Compoundings - April 2019 - 41
ILMA Compoundings - April 2019 - Counsel Compound
ILMA Compoundings - April 2019 - 43
ILMA Compoundings - April 2019 - Washington Landscape
ILMA Compoundings - April 2019 - 45
ILMA Compoundings - April 2019 - In Network
ILMA Compoundings - April 2019 - 47
ILMA Compoundings - April 2019 - 48
ILMA Compoundings - April 2019 - 49
ILMA Compoundings - April 2019 - 50
ILMA Compoundings - April 2019 - 51
ILMA Compoundings - April 2019 - 52
ILMA Compoundings - April 2019 - 53
ILMA Compoundings - April 2019 - 54
ILMA Compoundings - April 2019 - 55
ILMA Compoundings - April 2019 - Portrait
ILMA Compoundings - April 2019 - Cover3
ILMA Compoundings - April 2019 - Cover4
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