The Group I market is still seeing the ripple effects of market rationalizations of previous years while tight supplies of Group II base oils stand in the way of wider market adoption, Trinder said at the ICIS & ELGI Industrial Lubricants Conference on June 19.

Group III supply and demand has yet to balance out, although the effects of the temporary shutdown of the Pearl gas-to-liquids refinery in Qatars Ras Laffan Industrial City in early 2017 have largely abated. Co-owned 50-50 by Shell and Qatar Petroleum in a joint venture, the plant can produce up to 1.1 million metric tons per year of Group III and 300,000 t/y of Group II base oil.

Private Equity Firm to Absorb Italmatch

Bain Capital Private Equity announced an agreement last week to buy Italmatch Chemicals SpA., a lubricant additive supplier that has been on its own acquisition tear. Bain is buying Italmatch from Ardian, another private equity firm that has owned the Genoa, Italy-based company for four years. Terms were not disclosed. Bain officials suggested that they plan to provide Italmatch with funds to continue its shopping spree.

Italmatch was founded in 1997 and supplies chemicals for lubricants along with three other industries: water treatment, oil and gas, and plastics. Historically it focused on sulfur-based chemistries, supplying materials such as phosphorus pentasulfide, which is used by the lubricants industry to make zinc dialkyldithiophosphate, a popular antiwear and antioxidation agent.

London-based Bain manages assets of $95 billion compared to $71 billion for Paris-based Ardian. Bain also has more operations in the chemicals industry and is more global, as Ardians portfolio is weighted toward Europe.

China Hits Back with Tariffs

Lubricants and additives are on a list of imports into China from the United States that will be slapped by Beijing with a 25 percent tariff. The move is a return salvo in a tit-for-tat trade war that started with President Donald Trumps extra duties on Chinese steel and has escalated to encompass 1,102 goods worth U.S. $50 billion entering the U.S., including some lubricants and additives.

Grease Production Jumps in Europe

Lubricating grease production in Europe increased 8 percent in 2017, according to the National Lubricating Grease Institutes annual production survey. Production in Europe shifted toward products made with calcium soap thickeners and polyurea greases, while output in Africa also shifted toward calcium soaps.

European grease producers participating in the survey reported making 220 million kilograms of grease last year, or 18.8 percent of the worldwide total of 1.18 billion kg. The Middle East and Africa reported making 57 million kg, or 4.5 percent of the global total.

The report is the worlds most comprehensive survey of grease production, but officials with the U.S.-based NLGI always emphasize that grand totals should not be used to gauge year-to-year shifts since participants vary from one year to the next.

The association does show totals of figures reported by all companies that have participated for three years running and advises that those numbers serve better for year-to-year comparisons. Based on comparative data, grease production in Europe jumped 8 percent in 2017, making the biggest contribution to a global increase of 3.2 percent.

Motorbike Oil Demand on the Rise

Demand for motorcycle oils will grow at an average of 3.5 percent until 2022, with India, China, Indonesia and Thailand accounting for more than half of that demand globally, consultancy Kline & Co. said in a recent report.

While most markets in the Asian region currently use low-end lubricants, Europe has the highest penetration of synthetic and semisynthetic products, accounting for 80 percent of the market, Kline found. The growth of two-wheelers globally is down to their ease of use and the rising number of women riders, it said.

At the Plant

Ineos will spend $3.15 billion on a new ethane cracker and a propane dehydrogenation unit in Northern Europe, using feedstock from the U.S. It will be the first cracker built in Europe since the 1990s.

Oxea will increase its European production capacity for neopentyl glycol – a polyalcohol that can be used as a building block in lubricants – by early 2020 through a debottlenecking project underway at its factory in Oberhausen, Germany.

Serbian lube marketer Fam opened a corrosion inhibitor and degreaser production unit. The government is now seeking a foreign investor for
the company following years of financial struggles under its previous owners.

Aztec Oils Ltd. is rolling out a $1.6 million upgrade at its main Bolsover site in the United Kingdom, including a new 900 square meter warehouse that will increase storage capacity for its Aztec-branded lubricants to more than 400,000 liters.

Infineum U.K. Ltd. began construction of a research and development center at its headquarters in Abingdon, U.K. The chemical additive company did not disclose the size or cost but said the center will employ around 80 people.

Dow Chemical Co. announced it would double global glycol ethers capacity in order to meet increasing demand in key end-markets and applications.

Greif Inc. commissioned a 2 million steel drum per year plant – the companys seventh in Russia – at a brownfield site in Vorsino industrial park, Kaluga Region. The company also partnered with industrial packager Tholu B.V. to open a new multimillion-euro intermediate bulk container factory in Ede, The Netherlands, to serve the Benelux region.

Lukoil will build a lube blending plant in Kazakhstan in 2019 with capacity of 100,000 t/y. The company also opened a new modernized loading center for lubricants and bitumen products at its refinery in Volgograd, Russia, the company announced last month.

Russian industrial lubricants and grease marketer Titan built a new plant in Novocherkassk, introduced a new filling line and entered new markets, a company official said.

Doing Deals

Fuchs Group acquired Comercial Pacific Ltdas lubricants business in Chile, which will be rolled into a new company called Fuchs Lubricants SpA.

The Abu Dhabi National Oil Company, the U.A.E.s state oil company, secured a GM dexos1 license and a license for GMs Dexron VI automatic transmission fluid for its ADbase base oil.

Adnoc, Saudi Aramco and a consortium of three Indian oil companies signed a framework agreement for the development of a $44 billion refinery and petrochemical complex at Ratnagiri in India.

Chemical and ingredient distributor Univar Specialty Consumables Ltd. extended its distribution deal with BPs lubricant brand Castrol Oil Co. to distribute its range of industrial lubricants and greases.

Ison Distribution Ltd. will distribute Fuchs Silkolene motorcycle lubricants in the U.K.

Global maritime contractor Van Oord signed a five-year partnership agreement with Shell Marine for the lubrication of its fleet.

ExxonMobil Lubricants started a partnership with Indian service chain GoMechanic as an exclusive lubricant partner for providing complete car care to customers in India.