HONG KONG – Todays additive shortages are real and are part of a long-term structural change, according to Afton Chemical President C.S. Warren Huang. While additive companies may engage in minor regional investments, especially in the Asia Pacific region, Huang warned last week that there may be no significant new capacity for eight to 10 years. Low return on investment and slow-to-no demand growth make any major lubricant additive investment unlikely.
Huang told the Fuels & Lubes Asia Conference here on Mar. 2 that excess capacity in the petroleum additive industry is gone, and the current tightness is here to stay. Although the chemical industrymay historically cycle from boom to bust every four years, the current cycle will be eight to 10 years, Huang said. Eventually there will be new capacity, but no one will rush to build.