Bio & Synthetics
Global palm oil production is booming, but the basic oleochemicals market is saturated, according to Frost & Sullivan.
BMW Malaysia Sdn. asked the Malaysian government to reconsider its plans to implement its B10 biodiesel mandate in October this year, concerned that increased palm oil content could impair engine lubrication.
The Asia-Pacific region is the worlds largest market for finished lubricants, and with rapidly growing economies, its set to leap-frog some other regions to become one of the most pivotal markets for synthetic and semi-synthetic products in the coming years, according to consultancy Kline & Co.
Lubricant demand in China has jumped so much in recent years that some now deem it the worlds biggest market, surpassing the United States. The countrys demand for polyalphaolefins, however, remains scant.
Japans Mitsui & Co. Ltd. will invest U.S. $44 million in Malaysian-owned oleochemical manufacturer Taiko Palm-Oleo (Zhangjiagang) Co. Ltd., located in Jiangsu Province, China.
Industry observers say biolubricants are unlikely to take off in Asia unless governments provide incentives or mandates for their use. Malaysia appears be taking steps to do just that.
Asia is a very minor market for the finished products, with demand that pales compared to Europe and the Americas. However, biolubricant suppliers say Asian demand could take off if prices come into line and regulations are put in place.
Synthetic lubricant demand in Asia-Pacific should rise in coming years as governments toughen regulations on fuel economy and vehicle emissions, an ExxonMobil Chemical official told an industry conference in Beijing last week.
Frost & Sullivan projects revenue from oleochemicals manufactured in Southeast Asia - including fatty acids and fatty alcohols used in lubricants manufacturing - will more than double from 2013 to 2020.
Naco Lubrication Co. and Luan Group are building a plant in Chinas Shanxi Province that will use coal-to-liquids feedstocks to manufacture polyalphaolefins for synthetic lubricants. The PAO facility is scheduled to begin operations in the third quarter of 2015.