According to Kline & Co.s Global Lubricant Basestocks report, the base stock market registered very small growth in 2016 over 2015. While API Group II and III base stocks enjoyed good growth rates, Group I continued on a downward trajectory.

The global base stock market is witnessing substantial structural changes, Kline reports. These changes are stimulated by changing demand due to evolving technological and environment requirements, as well as alterations in the supply landscape.

Kline noted that 2016 continued the trend of shutting down excess Group I capacity that temporarily balanced markets in select regions of the world, but the overall supply glut continued. The glut was further abetted by new capacity primarily dedicated to produce Group II and III.

According to Anuj Kumar, project manager in Klines Energy Practice, New base stock capacity additions continue as a number of projects are underway. The new capacity will outpace demand growth for finished lubricants and result in supply overhang, putting greater pressure on high-cost plants to sustain operations.

Kumar noted that certain market segments hold strong growth potential. For example, more stringent requirements for passenger car engine oils will increase the need for high viscosity index products. He added that higher VI Group III base stocks are more easily differentiated from mass-market base stocks. Sensing this need, some Group III suppliers like Petronas are making an upgrade from Group III to Group III+ in a phased manner.

Slavneft Completes Group III Upgrade

Slavneft has begun making API Group III base oils at its plant in Yaroslavl, Russia, according to Rosneft, a partner in the refining joint venture. Rosneft said it is also mulling production of Group II and extender oils at its Novokuibyshevsk refinery in 2018.

Slavneft is a 50-50 joint venture between Rosneft and Gazprom Neft. Before the upgrade, the Yaroslavl plant had capacity to make 250,000 t/y of Group I oils. In late August we will ramp up high quality base oil production in Yaroslavl, Tibur Leimeter, head of RN-Lubricants research and development, standardization and technology department, told GBCs CIS Base Oils and Lubricants conference in May. These products are meant to substitute for the imported Group III base oils coming into the Russian market.

Although European refiners have been steadily shuttering Group I capacity, Slavneft does not plan to reduce its Group I base oil production, Rosneft confirmed. Those who are doing this are actually flushing out not only Group I production, but also reducing wax, slack wax and bright stock sources. We actually go in the opposite direction and leave the residual oils in to make more high-viscosity products needed on the European and Chinese markets.

Novokuibyshevsk is also preparing a 250,000 t/y Group II upgrade, which is set go online in April 2018, Leimeter confirmed. At the moment, the refinery has capacity to produce 230,000 t/y of Group I base oil, which will be scaled down to 100,000 t/y in 2021.

GF-6 Timeline May Slip Again

At the semiannual gathering of ASTM Committee D2, both the Passenger Car Engine Oil and Heavy Duty Engine Oil Classification Panels discussed the status of key industry specifications, starting with the much-delayed ILSAC GF-6 passenger car engine oil upgrade. Much of the discussion covered new and legacy engine tests needed to support ILSAC GF-6. It has become clear that the earliest marketers could license these engine oils would be July 2019.

No official timeline is in place because details around all tests are not finalized, and stakeholders do not want to issue a revised timeline until they are more confident in their ability to confirm an official date. However, this date considers the status of all the engine tests being developed, and accounts for the one-year tech/demo period for the additive companies to finalize their technology, as well as the one-year mandatory waiting period once the specification is defined and limits are agreed on.

The new Sequence IVB engine test appears to be the critical test in determining final GF-6 timing. The earliest that test could be finalized is year-end 2017. Other tests are ready or much closer to being finalized.

One consideration to not delay ILSAC GF-6 further would be to launch the new specification with the existing Sequence IVA test and replace it with the Sequence IVB at some point in the future. However, this option may not be viable because the tests are somewhat different, which could impact formulation space. As a result, the first-allowable use of the GF-6 designation on product labels could be delayed well past July 2019.

Existing diesel engine tests were also discussed, and most seem to be in good shape until at least 2020. The Engine Oil Aeration Test has only one engine remaining and should be replaced by the new Caterpillar aeration test, but at this time is not viewed as urgent.

Volvo Phasing out Combustion-Only Engines

Volvo announced all future models will use some form of electric propulsion, whether hybrid with a gas engine or all-battery. The company said it hopes to become the first traditional carmaker to produce no vehicles based solely on internal combustion engines.

The transition will begin with three new products set to roll out between 2019 and 2021. The complete transformation likely will not be completed until the middle of the 2020s. Volvo hasnt announced what share of future products will be conventional hybrids, plug-ins or pure battery vehicles.

Volvo will produce electrified products in Europe, China and the United States. The company expects to be selling 1 million electrified vehicles annually by 2025.

Infineum Launches GF-6 Hub

Infineum has launched an ILSAC GF-6 information hub, providing an online guide to the upcoming North American performance category change for passenger car motor oil. Hosted on InfineumInsight, the hub provides the latest news, updates and insights from the companys GF-6 experts, addressing a host of questions. These include the drivers for GF-6, the expected performance differentiation of the new category and the estimated timeframe for its launch.

Jorge Pain, portfolio manager for PCMO additives, Infineum USA, L.P., said, GF-6 represents a significant specification overhaul. Industry is replacing almost every test and adding several new ones, addressing increased or emerging lubricant performance and protection requirements. In this changing environment, our hub will provide an informative, single point of reference for stakeholders, keeping them up-to-date on the categorys development and its potential impact on the global marketplace.

Functional Products Acquires Tackifier Line

Infineum has confirmed the sale of its Paratac brand and associated business to Functional Products Inc. Terms of the transaction were not disclosed.

Functional Products formulates, blends and manufactures lubricant additives to improve the performance of oil, grease and biobased fluids operating under various conditions. Company President David DeVore commented, We are thrilled to have the Paratac and Paratac XT brands as part of our tackifier portfolio. Our customers know that Functional is committed to tackifiers with an assured, ongoing supply as well as technical support for innovation.