With no apparent relief in sight as it relates to global demand for products, no immediate increase in worldwide production capacityand the lack of raw materials, it has become clear to Oronite that it will be unable to satisfy the current level of demand by its customers for at least the next several months to come, the company said in a written statement to Lube Report.

Market observers said the companys predicament has customers scrambling for ways to meet their own supply needs.

At this point, were still trying to determine what alternatives we have, said one customer, who spoke on condition of anonymity.

A subsidiary of Chevron Corp., Houston-based Oronite supplies additives for lubricants and fuels. It has three main factories – in Belle Chasse, La., Gonfreville, France, and Jurong Island, Singapore – plus secondary facilities in Brazil, Japan and India.

Companies exercise force majeure provisions of contracts in order to obtainrelief from contractual performance requirements when performance is impossible because of events beyondtheir control.

Oronite said its predicament resulted from a combination of rising global demand for lube additives and tight supply for the raw materials and components used to make them. The company did not identify the raw materials in question but said the problem has affected all of its lubricant additives except viscosity index improvers. Its fuel additives have not been affected.

Oronite did not go into detail about the extent to which deliveries have been or will be curtailed. It did say the company has tried to use alternative supply lines but met with only partial success.

We have obtained raw materials and components from third-party sources, often at substantially higher costs than before, and we were still unable to secure raw materials and components, it said. We have worked with a number of alternate suppliers to make up our internal shortfall. Oronite has gone to great lengths to help our customers through their supply needs by releasing supply obligations.

While agreeing that the market for some raw materials is tight,two other large lube additive suppliers said they have not had difficulty meeting orders.

The additive industry supply/demand balance has tightened in recent years, said Nigel Bell, vice president for marketing at Abingdon, U.K.-based Infineum International Ltd. Our plants are running well but are heavily loaded.We do not expect to have problems supplying agreed business, but we will be monitoring sales carefully.

Lubrizol Corp. Vice President of Communications Joanne Wanstreet said, We have not experienced the raw material shortages that Oronite has referred to. We have no concerns about taking care of our customers into the foreseeable future.

Oronite said its force majeure declaration was not caused by a March accident at its Singapore plant nor by safety issues that later arose elsewhere. The Singapore plant – the largest lube additive factory in Asia – operated at reduced levels for several weeks after an explosion that killed one employee and injured another. As part of its follow-up investigation, Oronite conducted safety audits at other plants. Its findings led the company to have employees undergo additional training and plant managers to implement process changes to enhance safety and reliability. Operations at those other plants were cut back during that process but have since returned to normal levels, the company said.

Except for production of zinc dithiophosphate, production in Singapore has returned to normal levels. The company said restart of its ZDTP unit requires involvement of the Singaporean government and that a schedule has not been set.

The Singapore plant has begun a three-week maintenance turnaround scheduled to be completed by the second week in September. Oronite added that the turnaround has been scheduled for more than a year and is unrelated to the accident. Likewise, the Belle Chasse plant will undergo a regularly scheduled two-and-one-half week turnaround beginning in October.