Incidents & Disruptions
The economic crises created by the Covid-19 pandemic will probably trigger an overdue consolidation of global base oil capacity, an official from Solomon Associates said during a webinar last week.
Rerefiners in North America are feeling the impacts of the Covid-19 pandemic in the form of reduced demand for their base oil and finished lubes, along with less feedstock. This is due to a dramatic decrease in the number of miles driven, with most people teleworking and traveling less for work, recreation and tourism.
Several major and independent lubricant marketers have reduced prices on finished products in the United States in recent weeks. Industry insiders said the move was predictable given recent reduction in base stock prices and complicated in some cases by measures taken to combat the Covid-19 pandemic.
Industry observers believe the Covid-19 pandemic could reduce lubricant demand at least as much as the Great Recession of 2008 did, though they expect the global crisis to affect some product categories more than others.
Calumet Specialty Products Partners L.P. will close a lubricants plant in New Jersey and furlough manufacturing employees at a Missouri synthetic lubricants plant as part of its efforts to shore up the company’s balance sheet, according to a statement released last week.
The Covid-19 pandemic has caused automakers around the world to temporarily close factories, and this will reduce demand for factory fill lubricants as well as some industrial lubes, analysts say.
Three lubricant industry associations in the United States petitioned India’s government last week to approve the export of castor oil derivatives stuck at India ports as part of a national lockdown to combat the Covid-19 pandemic.
Fog and floods are regular disruptors to barges carrying base oils on rivers. Suppliers and buyers can take steps to minimize impacts, though not to escape them completely.
The Independent Lubricant Manufacturers Association is reaching out to members and governments to inform them that lube blenders are considered essential or life-sustaining and may continue physical operations under stay-at-home orders issued to contain the coronavirus pandemic.
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