Turning over a New Leaf
In Japan, people travel long distances to enjoy the quiet contemplation of the colorful fall leaves, an activity that boasts its own name: “momijigari” (literally, leaf hunting).
It is interesting that this process should be taking place at the end of the year, when people also try to shed old, unwanted habits, like leaves being tossed to the wind, and are eager to start a new year with bright hopes and optimistic expectations.
After a tumultuous 2020 during which the coronavirus pandemic ruled like a tyrant determined to turn the whole world upside down, the base oil and lubricants industry also appeared ready to cast aside some of its old garb and start the new year with a fresh attitude and renewed energy.
A few initiatives that were born last year will probably take hold in 2021, including price adjustments that are likely to see full implementation in the United States in the first few weeks of the year.
In late November, Phillips 66 and SK Americas were the first to announce posted price increases of 20, 25 and 30 cents per gallon for their Group II+ and API Group III base oils. Like many of the events of 2020, this initiative was unusual, since it is typically the domestic Group II producers that introduce price adjustments to the U.S. market.
They were quickly followed by Petro-Canada and then by a deluge of price announcements from most producers and rerefiners, including Motiva, Chevron, ExxonMobil, Excel Paralubes, HollyFrontier, Calumet, Paulsboro, Avista Oil and Safety-Kleen, which communicated increases between 20 and 30 cents per gallon.
Similarly, a majority of naphthenic base oil producers, including Ergon, Cross Oil, Calumet and San Joaquin Refining, also implemented 20-, 25- and 30-cent increases, depending on the supplier, location and grade.
Aside from price discussions and tight fundamentals, a great deal of attention focused on the changes that vehicle electrification would be bringing to the industry, and on sustainability efforts that many companies were starting to explore.
While not all the lofty expectations may come to fruition, the industry appeared eager to embrace and adapt to the transformation ushered in by new technologies and the changing business environment as it stepped into the New Year.
Gabriela Wheeler is base oil editor for Lubes’n’Greases. Contact her at Gabriela@LubesnGreases.com