Rerefiners of used lubricants suffered some of the same problems that have impacted producers of virgin base oils during the COVID-19 pandemic: an initial drop of demand, workplace disruptions, increased transportation costs.
But one of the biggest problems for virgin base oil producers – a shortage of feedstocks for their own operations – became a big advantage for the rerefining segment; rerefiners experienced little loss of feedstock supply and enjoyed a significant uptick in demand from lubricant blenders who could not find enough virgin base oil.
Special Report
Base Oils Emerge from Pandemic
Click here to read the full report
As is usually the case when crude oil prices are high, rerefined base oils are also enjoying a cost advantage compared to virgin base oils, since rerefineries rely on waste oil as feedstock.
Rerefiners say they are also getting a new boost from the sustainability movement, which is spurring interest in recycled raw materials and looking for opportunities to replace petroleum products.
Read our full magazine feature article about the rebound of refining in Lubes’n’Greases’ Special Report: Base Oils Emerge from Pandemic, which also contains updates on base oil price trends and China’s base oil supply base.