Group III Dominates India Synlubes

MUMBAI - Demand for synthetic base stocks in India is growing, but the markets price consciousness means that most of the volume increases in coming years will be for API Group III base stocks, officials from Hindustan Petroleum Corp. Ltd. told an industry conference here last week.

India consumed 2.4 million tons of base stocks in 2014, Senior Market Manager for Technical Services Minaketan Panda told the ICIS India Base Oils & Lubricants Conference April 6. Only 6 percent of that volume, or approximately 140,000 tons, was synthetic, he added, and 70 to 80 percent of that was Group III. But different types of synthetics were experiencing the fastest growth rates in the market, he said. Group III demand in India is increasing at a compound annual rate of 8 percent, while polyalphaolefins are growing at a 10 percent clip and esters at a rate of 3 percent.

By comparison, demand for Group II oils is rising 3 percent per year, as is demand for naphthenic stocks. Group I oils account for 60 percent of the base stocks consumed in India, and their volume is flat, according to HPCL estimates.

Senior Manager for Business Development Debesh Purohit cited several factors that are pushing increased use of synthetics in different types of lubricants. For automotive engine oils, end user desire for longer drain intervals creates a need for base stocks with greater thermal and oxidative stability. In addition, fuel economy mandates require lighter stocks with higher viscosity indices. These trends lead to increased use of Group III stocks and PAO.

Industrial lubricants are also affected by the push for improved fuel economy and longer drain intervals, but applications such as metalworking fluids and fire-resistant hydraulic fluids also face demand for better fire safety and resistance to formation of deposits, which are leading to increased use of esters, as well as Group III and PAO. Rising demand for food-grade lubricants also raises demand for esters and PAO.

Along with the factors favoring increased use, synthetics other than Group III face a major obstacle, Purohit said: high costs. As a result, formulators will look for ways to stretch their expenditures. As an example, he cited a trend in the blending of automotive engine oils.

In India, which is a very price-conscious market, you may not see a lot of PAO, but synthetic blends of Group III and Group IV will become very popular, Purohit said. The move to Group III will be supported by favorable prices because Group III prices are very close to Group II.