Moncrieff added, Improved market conditions, allied with cost pressures, contributed to the upward base oil posting adjustments. On the cost side, low sulfur vacuum gasoil prices dropped by nearly $4/bbl during March and greatly helped the profitability of virgin base oil refiners.

Kline expects the margin improvements registered in March to continue into April as the full effects of the recent round of upward base oil price increases are felt and fundamentals remain tight. However, the impending impact of Chevrons Pascagoula plant start-up in May/June continues to cast a cloud over the ability of producers to raise margins to pre-2013 levels in the medium term.

A detailed description of the Margin Index can be found at klinegroup.com/management-consulting/basestocks/lubes_basestocks_index.asp.

Finnish Rerefiner Goes Belly-up

Finnish rerefiner L&T Recoil Oy and parent company EcoStream Ltd. filed for bankruptcy at the end of March, a former company official confirmed, and an estate administrator is seeking buyers for assets that include a rerefinery in Hamina, Finland.

L&T Recoil Oy and its then joint venture partner EcoStream opened a 45 million rerefinery in 2009. With 1,200 barrels per day of API Group II capacity, the plant was fed by used lubricants collected in the Nordic and Baltic countries and Finland.

Its not a reorganization anymore – the companys been declared bankrupt, Petri Rautanen, formerly managing director for L&T Recoil Oy, said in an interview. Now an estate administrator is looking for new companies to run the rerefinery or parts of the rerefinery.

Pauliina Tenhunen, managing partner for Helsinki-based law firm Castren & Snellman Attorneys Ltd., is serving as estate administrator for the bankruptcy case. I understood when we have been speaking with the officers of the company, that they could not get any more financing for the company to continue, Tenhunen said. That was the main reason.

Tenhunen said the goal is to find buyers for the EcoStream and L&T Recoil Oy assets soon because it costs money to keep the assets secure in the meantime. We dont have any business there now, but we have to have people watching and securing the assets, she said. So thats why were hoping the process will be quite fast. Tenhunen noted that while they are already in touch with companies that are potential buyers, if there are more potential buyers, we ask them to contact us.

Marc Verfuerth, CEO of German rerefiner Avista Oil AG, said his company is among those in communication with the estate administrator about the assets in Finland. We think that this installation is interesting for us as an investment, as a facility – the technology they operate is quite interesting, Verfuerth said of the rerefinery in Hamina. Their problem remains having their facility at the wrong place in Europe – a very small, domestic market with just 17,000 tons of used oil. That is not sufficient enough to feed a 60,000 mt/y annual capacity.

The estate administrator has said they are more interested in finding somebody that will continue the operations at Hamina, Verfuerth noted. I would say that at least for Avista, a continuation of the operations is not an option under the existing circumstances, and that I cannot imagine that others would be honestly interested in operating at this location, with not enough long-term import markets close and a low-volume domestic market, he said. However, I see that involved parties could watch out for investors who want to continue the operations at Hamina.

He noted that while Avista is one of the parties looking deeply into EcoStreams assets, it is also looking into the new market opportunities in the northern part of Europe. We at Avista Oil are in negotiations with generators and collectors of waste oil in Finland to secure our throughput for our existing rerefineries, which are mostly underutilized like many of our competitors are, Verfuerth said. If you ask me, the market in Europe is really looking for consolidation, and what happened there in Finland is part of the ongoing consolidation. And it may not be the end of such news.

Southwest Launches F&L Consortium

Southwest Research Institute has launched the Advanced Engine Fluids consortium to better understand fuel and lubricant chemistry and its effects on engine combustion. The consortium will hold its first meeting on July 7, 2014, at Southwest Research Institute in San Antonio, Texas, United States.

Membership in the consortium is $100,000 per year and can be renewed annually. Members receive monthly updates and meet quarterly. Also, members will receive free licensing for any patents that are produced from the consortiums work.

Engine technology is changing so rapidly that it has become difficult for fuel and lubricant technologies to keep up, said Thomas Briggs, a manager in the Engine Systems Research and Development Section in the Engine, Emissions and Vehicle Research Division. The new technologies being applied to engines are dramatically changing the demands placed on the fluids. We are also seeing more and more evidence that the chemical and physical details of the fluids significantly impacts engine performance.

The consortium will research the impact of fuels and lubricants on engine combustion and the requirements needed to optimize future engine technologies. Our research will focus on ways to accelerate improvements for fuels and lubricants to keep up with emerging fuel economy standards, Briggs said.

For more information, contact Briggs at thomas.briggs@swri.org.

Fuchs to Boost Production Down Under

Fuchs announced plans to build a new manufacturing plant near Newcastle, New South Wales, Australia. The German lubricant manufacturer expects to begin construction in mid-2015 and to be fully operational by mid-2016. Fuchs did not disclose the projects cost.

Fuchs selected the new 25,000 square meter site in Beresfield because of its proximity to major connecting highways and also because it is close to the companys Wickham facility, which the new plant will replace. All existing employees will be able to continue to work at the Beresfield plant, the company noted in its press release.

The existing site in Wickham was too small to expand, so we made the decision to move to the new Beresfield site which will allow us maintain our experienced workforce and increase our production capacity and operational efficiencies to better service our key customer base in New South Wales and Queensland, said Wayne Hoiles, managing director of Fuchs Lubricants Australasia.

While such a significant portion of Australias manufacturing is moving offshore, we have focused on growing our business in Australia and New Zealand, particularly in high demand areas, Hoiles continued. Fuchs also noted that the company is focused on not just Australia and New Zealand, but on Southeast Asia as well.

Fuchs completed an A $4.5 million (U.S. $4.1 million) warehouse facility in Melbourne, Australia, last August, which it said was the first phase of an A $6 million plan to increase lubricant production capacity and efficiency there by the end of 2014.

Albemarle Sells Antioxidants Business

SI Group signed a deal to acquire Albemarles antioxidants, ibuprofen and related business and assets, including a lubricant antioxidants line. Terms were not disclosed. Subject to approvals, the acquisition is expected to be completed later this year.

The transaction includes Albemarles manufacturing sites in Orangeburg, Southy Carolina, United States, and Jinshan, China. It also includes Albemarles applications and technical support capabilities in Shanghai, China, and in Baton Rouge, Louisiana.

SI Group said the deal expands its antioxidants business. According to SI Groups website, the companys product lines include oil additives and industrial fluids. The oil additives include inhibitors, antioxidants and dispersants.

According to Albemarles website, its Ethanox lubricant antioxidants enhance thermal stability, improve lubricant performance and reduce sludge formation, extending the useful life of lubricants. They reduce thickening and inhibit acid formation in a variety of applications, including engine oils, automatic transmission fluids and industrial oils, as well as compressor oil and gear and hydraulic oils.

Its the largest deal in SI Groups history, Frank Bozich, SI Group president and CEO, said in a news release. This acquisition is a natural fit to our expansion strategy, transforming SI Group into a solutions leader in the global antioxidant and pharmaceutical active ingredients markets.

Shell Opens Shanghai Technology Center

Shell opened a 1.8 billion (U.S. $290 million) lubricant technology center in Shanghai in April. The worlds largest lubricant supplier hopes the facility will help it attract more business in China and neighboring countries.

Occupying a nine-story, 8,600 square meter building in Zhangjiang High-Tech Park, the center will house research on a wide range of lubes and greases, including passenger car and heavy-duty engine oils, motorcycle oils and transmission fluids, as well as specialty oils and greases. The Shanghai facility is Shells third such center, joining laboratories in Houston, Texas, United States, and Hamburg, Germany.

Carl Bechem Completes Acquisition of Etna Bechem

Hagen, Germany-based Carl Bechem GmbH has completed the acquisition of its joint venture partners 50 percent interest in Etna-Bechem Lubricants LLC. As a result of this transaction, Carl Bechem has formed a new company – Bechem Lubrication Technology LLC in Chagrin Falls, Ohio, United States. John Steigerwald has been appointed president of Bechem Lubrication Technology. Steigerwald served as president of Etna-Bechem Lubricants Ltd. since the beginning of the joint venture in 1999.

Krahn Buys Pietro Carini

Krahn Chemie GmbH has acquired a majority share in Pietro Carini S.p.A., a speciality chemical distributor headquartered in Milan, Italy. Founded in 1868, Pietro Carini has 27 employees and supplies speciality chemicals to the plastics, rubber, adhesives, sealants, inks, and coatings industries.

The acquisition of Pietro Carini is a high strategic fit, Axel Sebbesse, Krahn Chemies managing director said. Pietro Carini provides us with a strong regional footprint and a solid basis for further growth in the highly attractive Italian market.