NEW ORLEANS – The loss of market share that API Group I base oils have experienced for many years will likely continue and accelerate, and the rationalization pressure on small Group I plants in Europe and Asia will continue as Group II and III supply makes further inroads globally, an industry insider said at a conference here.
“The advantages the Gulf Coast, Middle East and parts of North Asia have in terms of Group II and III production will give them incentive to increase utilization, and certainly the world has plenty of capacity to make up for that loss of Group I,” Blake Eskew, IHS Markit‘s vice president for oil markets, midstream, downstream and chemicals, said at Active Communication Internationals U.S. Base Oils and Lubricants Summit in New Orleans, on Aug. 28. “Economic pressure to replace uneconomic Group I plants with Group II and Group III has been a constant for the past decade. We see that maintaining that same relationship going forward.”
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