Fluid blenders quickly began scrambling to decide what they would do without the markets dominant supplier. A host of chemical additive companies jumped into the market offering a wide variety of solutions, including synthetic sulfonates and alternative chemistries.

For all of the commotion, the impact of Martinez closing has been long in coming and surprisingly smooth. Market observers say the full transition still has not occurred, even five months after the base oil plant ceased production. Moreover, many say now that cost increases will not be as severe as originally expected.

In terms of sulfonates actually being used in production of metalworking fluids, the closing of the Martinez plant appears to have had little impact, yet. Observers say Shell churned out a lot of volume before shutting down the plant – volume that is still in the pipelines of its former customers five months later.

Customers that bought directly from Shell still havent gone through all of that product, so in that sense, the transition hasnt occurred yet, said an official at one metalworking fluid blender, who spoke on condition that he not be identified. Once that supply is depleted, I think its safe to say that fluid prices are going to start to go up.

A transition has occurred, sources say, insofar as most fluid suppliers have prepared formulas for life after Martinez. In some cases, this meant dusting off formulas that were developed some years ago – in anticipation of an event such as the closing of Martinez – but never used. For others, new formulas were developed during the past year.

In the vast majority of cases, former Martinez customers have switched or will switch to formulas that use synthetic sulfonates or alternative chemistries. Thats because there was no other supplier of natural sulfonates able to replace Shell. Crompton Corp. is importing natural sulfonates from Europe, but observers say it is dealing in relatively small volumes. Penreco opened a second natural sulfonate plant in December, but many blenders had already chosen new formulas by that time.

Moreover, Penreco contracted Lockhart Chemical Co., of Gibsonia, Pa., to be exclusive outlet for its sulfonates. Some observers speculated that the added link in this supply chain could increase costs. Lockhart officials could not be reached for comment.

Natural sulfonates have been popular largely because of their formulating ease and relatively low cost, but fluid blenders say that reformulation has not been as expensive as they feared. Part of the reason appears to be that so many chemical additive companies – a couple dozen, at least – jumped in to offer solutions.

Fluid companies ended up having a number of options to choose from, said Cathy Novak, metalworking fluids product manager for Eastern Oil Co., of Pontiac, Mich., and chair of the Independent Lubricant Manufacturers Associations Metalworking Lubricants Committee. Costs have gone up a little bit, but the pricing hasnt scared me to death.

Market sources said it is too early to guess how much prices for finished fluids will increase. Some noted that end users, especially large manufacturers, are typically very strict about accepting price increases.

Some predicted that some fluid companies will avoid cost increases altogether – at least for some products – by continuing to reformulate until they find more cost-effective recipes.

It depends on how much work the [blender] wants to put into it, said Jeffrey J. Lettrich, Lubrizol Metalworking Additives general manager for metalworkingin the Americas. There are two basic approaches that you can take. One is to put a band-aid on the old formula and continue to use it. The better approach is to back up and rework the formula until you have a better solution.

The metalworking fluid market may still be waiting for the full impact of the loss of Martinez, but companies appear to sleeping a little bit easier