Meet the New Normal: Bio-based Lubricants to Become More Prevalent in the Coming Years

Historically, bio-lubricants have constituted a small percentage of the finished lubricants market globally. The leading markets for bio-lubricants are primarily in North America and Europe, including the United States, Germany, and the Nordic countries.

In 2014, the market seemed to have tremendous potential. Now, in the early days of 2017, we are slowly witnessing the fruits of that potential. Government regulations and procurement seem to have created a demand for bio-based lubricants. However, it seems government initiatives alongside regulations and emergence of high performance basestocks are pushing the once niche segment to the forefront, albeit moderately. (more…)

South American Finished Lubricants Market: Time for Rebuilding

Sergio Rebelo addresses the audience at the 12th ICIS Pan American Base Oils & Lubricants Conference
Sergio Rebelo addresses the audience at the 12th ICIS Pan American Base Oils & Lubricants Conference

In a presentation at the ICIS Pan-American Conference held in December 2016, Sergio Rebelo, Managing Director in Kline’s South America affiliate, Factor, discussed the struggles and opportunities of the South American finished lubricants market.

South America has a population of 419 million and a continental GDP of USD 3.6 trillion, roughly 5% of the global total. The top countries in terms of GDP are Brazil, Argentina, and Colombia. Nonetheless, the region is undoubtedly experiencing a challenging economic climate. Projected growth has been cut in half since 2010 and is forecast to grow 2.5% per annum until 2020. (more…)

Growth in the Latin American and Caribbean Finished Lubricants Market is at a Turning Point

finished lubricants, latin america finished lubricants
Opportunities in Lubricants: Latin America and Caribbean Market Analysis

Overall demand for finished lubricants in Latin America and the Caribbean was negatively affected by the regional economic downturn during the period from 2014 to 2016. However, this general challenging picture is hiding a number of dynamic markets, such as Chile, Dominican Republic, Panama, and Costa Rica, where lubricant demand is posting above-average industry growth, finds the recently published Opportunities in Lubricants: Latin America and Caribbean Market Analysis report by global market research and management consulting firm Kline.

As the region starts to pick up, it is entering a new post-recession cycle in 2017. The regional differences emerging show that growth will not be uniform. (more…)

Lucrative Opportunities Exist in the Nascent Lubricants for Wind Turbines Market

lubricants for wind turbines
Lubricants for Wind Turbines: Global Market Analysis and Opportunities

The split of lubricant consumption by region tracks the division of global installed capacity. China is the largest market for lubricants used in wind energy, accounting for 34% of total demand, followed closely by the United States with 21%. Germany and India account for an approximate share of 6% each. However, Germany’s demand is slightly more than that of India according to the recent Lubricants for Wind Turbines: Global Market Analysis and Opportunities report by global market research and management consulting firm Kline. (more…)

Increased M&A Activity of Finished Lubricant Distributors

synthetic lubricants, finished lubricants market,Over the past decade, the consumer automotive finished lubes value chain has become a hotbed of merger and acquisition (M&A) activity.

The most active areas of M&A activity in the lubes industry, in terms of number of deals, has been among distributors. Over the past 20 years, some 70 mergers or acquisitions have been closed by the following five leading distributors: PetroChoice, RelaDyne, Pilot Thomas Logistics, Brenntag, and Flyers Energy.

There are several forces leading to lube distributor consolidation. Lube distributors are often family-owned. Estate planning and succession can present issues as the next generation of the family decides whether or not to continue operating the business or to divest to either a strategic or financial buyer. (more…)

Kline’s Index of Base Stock Production and Re-refining Cash Margins Indicates Improved Profitability over the Past Three Months

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Base Stock Margin Index

In January 2014, 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 2014 release.

“Since the last release of the Margin Index, Brent crude oil prices have increased by one-third,” noted Ian Moncrieff, Vice President of Kline’s Energy Practice. “Brent crude oil increased from an average of $33.70/Bbl in quarter one, to $45.52/Bbl in quarter two, and then held steady through the first two months of quarter three. While VGO feedstock price increases for conventional Group II refiners were similar to those for Brent (i.e., VGO cracks remained stable), re-refiners experienced a smaller increase in UMO feed prices from quarter one to quarter two, as used oil collector/aggregators were able to limit reductions in pay-for-oil fees required of used oil generators as heavy fuel oil prices increased.” (more…)

Fuel Economy and Stringent Emission Standards are Increasing Demand for Low-viscosity Grade Basestocks

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Global Lubricant Basestocks: Market Analysis and Opportunities

The improving quality of finished lubricants and the burgeoning supply of high quality basestocks continue to create greater pressure on Group I basestocks to exit the market in the face of stagnant overall demand. In 2015, Group I basestocks account for less than half of the global basestock demand, down from over two-thirds a decade earlier, according to the recently published Global Lubricant Basestocks: Market Analysis and Opportunities report.

Passenger car motor oils formulation changes are driven by improvements in fuel economy, increasing engine oil durability, and maintaining compatibility with emission control devices and biofuels. The high viscosity index, low volatility, and low sulfur content has resulted in the reduced use of Group I and increased use of Group II and Group III.   (more…)

Free Webinar – Opportunities in Lubricants: North American Market Analysis – Consumer Automotive

Opportunities in Lubricants: North American Market Analysis
Opportunities in Lubricants: North American Market Analysis

Join Sushmita Dutta, a Project Lead in Kline’s Energy/Petroleum Practice as she presents insights from the recently published Opportunities in Lubricants: North American Market Analysis – Consumer Automotive edition in a live webinar that will take place on Wednesday, July 27, 2016 at 9 AM EDT|1:00 PM GMT.

You Will Learn About:

  • Key market developments and industry trends
  • Areas where growth opportunities exist
  • How the market is performing
  • Market outlook

If you are interested in joining us for the session, please click here to register. (more…)

Free Webinar – Global Used Oil and Re-refined Lubricants: Market Analysis and Opportunities

used oil, re-refined lubricants
Global Used Oil and Re-refined Lubricants: Market Analysis and Opportunities

Join Kunal Mahajan, a Project Manager in Kline’s Energy/Petroleum Practice as he presents insights from the recently published Global Used Oil and Re-refined Lubricants: Market Analysis and Opportunities report.

The webinar will be held Wednesday, July 20, 2016 at 9:00 AM EDT|1:00 PM GMT

You Will Learn About:

  • Key market developments and industry trends
  • Regions where growth opportunities exist
  • How the market is performing

Click here to register. (more…)

Despite Projected Growth, Economic Conditions are Expected to Strain the Brazilian Finished Lubricants Market

finished lubricants, basestocks, synthetic lubricants, baseoils, latin american finished lubricants
Brazilian Finished Lubricants Market

Brazil’s total demand for consumer automotive lubricants is nearly 400 kilotonnes. Passenger car motor oil (PCMO) accounts for the majority of the total Brazilian market. Furthermore, there are nearly 40 million passenger cars and light commercial vehicles and over 14 million motorcycles in use in Brazil in 2015.

The PCMO demand profile in Brazil has changed in the last few years due to OEM recommendations. Lower multi-viscosity grades account for almost two-thirds of the total PCMO demand. Monogrades account for about 6% of the PCMO market. The leading grades consumed are 15W-40/15W-50, followed by 20W-40/20W-50. A new SAE 0W-20 grade was introduced in the market in 2013, mostly as a result of Honda’s change in factory- and service-fill oil specifications and recommendations, but volumes are low as of 2015. (more…)