Deliveries of lubricants packaged in small containers, such as G-Energy and Gazprom Neft-branded products, last year amounted to 95,700 tons, an increase of 10.5 percent. In 2019, the company promotion efforts for G-Energy oils through its network of G-Energy automotive service stations paid off with a 61 percent sales boost from the segment.

Gazpromneft-Lubricants is the third-largest lube manufacturer in Russia after Lukoil and Rosneft, and controls 23 percent of the country’s finished lubricants market.

Global Lube Business Slowly Restarts After Pandemic Shutdown 

U.S. lubricants company Valvoline has largely recalled staff back to the workplace in China, according to a filing with the U.S. Securities and Exchange Commission. The company also resumed construction of a U.S. $70 million lubricant plant in Zhangjiang after the Covid-19 pandemic forced it to suspend activity in February. 

Hydrodec Group, a transformer oil company based in Ohio, U.S., also stated that is plant in Canton continues to operate, since it is considered to be essential infrastructure under the state government’s order.

Elsewhere, companies are still not back to normal. Pennsylvanian lithium supplier Livent Corp. halted work at its two Argentinian facilities in accordance with a national mandatory quarantine, as well as all capital expansion work, including a lithium hydroxide project in the U.S. and a lithium carbonate project in Argentina.  

Among other things, lithium compounds are used to make soaps that thicken more than two-thirds of the world’s grease.

Recession Catches Middle East Refiners

Global base oil markets are under intense pressure as the threat of a worldwide recession sinks demand for lubricants amid few signs of an early respite in the coronavirus pandemic. Middle East base oil refiners’ push for a bigger piece of the API Group II and III base oil market now leaves them exposed in a global base oil supply glut, along with a drop in base oil demand and prices due to the pandemic’s economic impacts.

Fears are also growing that base oil prices, which usually track crude prices, may see steeper falls than during the previous economic slump, when base oil prices tumbled more than 60 percent between late 2008 and early 2009, according to Argus Media.

Middle East Gulf refiners that are relative newcomers to Group II and III base oil markets seem particularly exposed to the downturn in the sector. Even before the Covid-19 outbreak, the region faced a supply glut of more than 3 million tons per year of Group II and III base oils, Dubai lubricant blender and base oil trader GP Global estimates. With demand in free fall, refiners confront a stark choice of either maintaining output and storing excess production or slashing production.

Middle East Gulf refiners have aggressively pursued market share in recent years, disrupting major markets such as China and India. In April, Mumbai-based Petrosil reported that the United Arab Emirates exported 38,000 tons of base oil to India in January, twice as much as the same month of 2019. But an excess of Group III stocks from the region might soon force production cuts. Conversely, Group II base oils have become interchangeable with Group I base oils as prices have narrowed between the two API grades over the last year, which is likely to support demand for Group II base oils, analysts said.

Still, a Tehran base oil executive said refiners can only go so far in scaling back production before incurring losses. 

“Some refiners may consider temporary capacity rationalization, but they may not economically go below 50 percent – they may be happy with a 25 percent reduction to keep stability,” he said.

Spanish Group Promises Lube Supply

The Spanish Association of Lubricant Companies assured the public that its member companies will continue supplying lubes for essential activities despite countermeasures taken by Spain’s government to combat the Covid-19 epidemic.

In a statement issued in April, Aselube advised that lubricant manufacturing is among the types of operations exempted from a March 29 order for businesses to shut down between March 30 and April 9.

The association, which is based in Madrid, said lubricants are necessary for activities that remain essential during the pandemic such as the transportation of food and other goods and operation of agricultural and public works equipment along with key manufacturing operations.

Huge Impact on Auto Jobs Says ACEA

The European Automobile Manufacturer’s Association says at least 1,110,107 European automobile manufacturing workers have been affected by plant closures due to the Covid-19 pandemic.

Doing Deals

Songwon made Bodo Möller Chemie Russia LLC its fuel and lubricant additives distributor in Russia, Belarus and Kazakhstan.

Winterthur Gas and Diesel gave Total Lubmarine’s Talusia Universal a No Objection Letter for all marine liquid and gas marine fuels with sulfur content of between zero and 1.5 percent. 

Hillenbrand Inc. will sell its Cimcool metalworking fluids business to DuBois Chemicals Inc. for $224 million cash. DuBois also agreed to pay up to $26 million as a contingent purchase price upon a future possible sale of the combined DuBois and Cimcool businesses. 

Zeaborn Ship Management, with a fleet of around 130 ships, will from now on handle the procurement of all engine oils, lubricants and greases for ship operations via Closelink, a start-up based in Hamburg, Germany that provides a digital procurement platform for maritime lubricants.

On Site

ExxonMobil held a virtual foundation-laying ceremony on March 31 for the expansion of its Jurong Island refining and petrochemical facility in Singapore. 

Chevron Lummus Global snagged a contract from an undisclosed Southeast Asian refiner for the license, engineering and supply of proprietary catalyst and equipment for a Group II unit. Elsewhere in the company, Chevron Corporation announced a 20 percent reduction in capital spending to $16 billion.

Russian lubricants marketer VMPAuto opened a small plant in the industrial sector of St. Petersburg. The facility is near a port on the Gulf of Finland and makes grease for the automotive and machine building sectors. It has capacity to produce 600 tons per year, but is designed to accommodate up to three reactors, which would increase capacity to 2,000 t/y.

Morris Lubricants invested £1.6 million in its production and reception facilities at its headquarters in Shrewsbury, United Kingdom. The investment includes new storage tanks and a bulk filling line.

Personnel

HollyFrontier announced that former Calumet CEO Tim Go will be its new executive vice president and chief operating officer effective in July. 

Alison Fisher has been named general manager of Lubrizol U.K.’s national headquarters in Derbyshire. She succeeds Simon Griffiths.  

Specialty chemical distributor Sea-Land Chemical Co. promoted Matthew Mapus to vice president of marketing. Mapus previously served as the company’s director of marketing.

Vickers Oils announced that Chris Wholley has taken over as managing director of Bejn R. Vickers & Sons Ltd. He succeeds Peter Vickers. 

Anderol Specialty Lubricants appointed Maurice Sonntag as its global sales manager. 

Curt Ellison joined Palmer Holland as a lubricants account manager.