Marine Lube Suppliers Struggle


The global marine lubricant market is mired in crisis, according to suppliers who say it is beset by skyrocketing costs and a shortage of chemical additives. One supplier said the possibility looms of ships being unable to have lubes delivered when they want them.

Most lubricant blenders have been bludgeoned the past year and a half by skyrocketing base oil prices. Marine lubricant manufacturers say they have been among the hardest hit, however, because of they depend mostly on bright stock. Posted prices for bright stock on the U.S. Gulf of Mexico Coast are $1.24 per gallon higher now than they were in January 2004. Postings for light and mid-grade Group I oils have gone up between 87 cents and 93 cents.

Additive availability has become an even more critical problem, though. Marine lube marketers say additive supply was already tight when a major source – a Chevron Oronite plant in Singapore – suffered a fire last March that hamstrung its production. That incident forced several suppliers of marine lubes to begin rationing product, according to Andrew Knox, head of marketing for Total Lubmarine. He added that the situation has now worsened.

Since then, a series of other additive company plant shutdowns has exacerbated the problem at a time when demand for products is booming, Knox said in an Aug. 26 news release. Most major marine lubricants companies have been put on allocation by their suppliers, creating an increasingly difficult supply position. In some cases, he said, shipping companies have found it almost impossible to get supply.

Total predicted marine lube additives will become even scarcer after Hurricane Katrina forced Oronite to close its principal North American plant in Belle Chasse, La. Even before the storm, Oronite had declared force majeure, stating that it could not meet contracted orders for most of its lube additives. The company says it does not yet know when the Belle Chasse plant will resume operations.

Knox said, [T]he very tight supply position and regular product shortages are likely to remain for the foreseeable future.

Bunker World published articles in late August quoting similar comments by Shell and Castrol officials.

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