In the passenger and commercial vehicle segments, lube manufacturers haven’t tackled problems posed by hybrid and electric-powered innovation. They will have to find the right developmental path [for lubricants] toward the needs of hybrid and electric power trains, Maxim Matuk, director for research at the Moscow consultancy RPI, told the eighth international Lubricants Russia conference held here last week.
The continuing expansion of the countrys vehicle fleet and the necessity to renew and develop the country’s infrastructure also provides opportunities for Russias lubricants market. Sustained replacement of industrial equipment at [industrial] plants and overall development of Russias eastern and northern regions are two very good prospects, Matuk said.
The Russian lubes market faces numerous challenges, Matuk said, including tougher domestic competition, non transparent selection of lubricant suppliers, insufficient production of high-grade lubricants, continuing demand for expansion of lubricants product lines and the costly procedure for obtaining OEM approval for new brands of lubricants.
Russian lube producers also have to monitor potential changes in environmental requirements for engines. It has a tremendous impact on the oils composition and characteristics, and on the operation of the engines. Domestic lube producers also have to evaluate the level of problems linked to the use of biofuels in passenger and commercial cars, Matuk said, adding that big challenge is the open need to develop and use cost-effective oils.
In the industrial equipment segment, Russian oil producers have to address the growing loads on oils, including thermal loads, in hydraulic and circulation systems. Tougher requirements on oils are a result of industrial technology development which leads to the necessity to develop and use more complex industrial oil formulations with a high content of additives, Matuk said.
Resolving the emerging contradiction between demand for broader product lines of specialized oils and the need to develop universal oils for different types of equipment is also a significant challenge, according to RPI.
Russian lube manufacturers have to retool and upgrade their own manufacturing capacities, including investments in high-end blending and filling capacities. Matuk noted they have to expand manufacturing of higher grade lubricants currently in demand and expand the assortment of lubes. On the other side, he said, marketing and sales departments have to improve interaction with the consumers to build more efficient sales systems (including cooperation with dealers and partners), to efficiently study the needs of current and new clients and position themselves more articulately and clearly in selected market segments.
For its part, base oil producers will also have to get ready for the modern developments in vehicle transportation and industrial equipment. Base oils for these applications have to have steady high and very high viscosity index as well as good low temperature and rheological properties. And they have to be low-evaporable and have high oil-flash point, Matuk said.
Russian base oil manufacturers also have to address such product properties as high thermal oxidative stability, narrow fraction content and stability, and be compatible with the international classifications.
Gradual transition in crude oil production from traditional to hard-to-recover reserves and the potential switch to non-traditional sources of crude oil such as shale oil and oil sands-based crude currently limit Russian base oil manufacturing. The next challenge is the continuing deterioration in the quality of produced oil [and] the growth of crude containing high levels of sulfur and tarry (resin), Matuk said.
RPI observed that most Russian refineries had insufficient oil conversion ratio and limited processes, compared to the developed countries. The consultancy also found in many cases the mixing of different brands of crude oil used for production of different petrochemical products, including lubricants.
Lack of significant investments in upgrading lubricant manufacturing facilities is another problem. Further development of base oil manufacturing will rely on several factors, Matuk stressed, including investment in construction of hydro catalytic processes at Russian refineries, commissioning of Group III base oil manufacturing facilities as scheduled and a more active study for application of new technology for manufacturing high class base oils at the Russian plants.