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Base Oil Report

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It is a fascinating phenomenon that so many new cooking programs have sprung up on U.S. television in recent years. Some of them are traditional shows where someone demonstrates how to prepare a more or less complicated dish, while others involve a dramatic competition among a number of chefs.

Many of these cooking competitions are based on the premise that each of the participants has to come up with an original dish prepared with the same surprise ingredients. The resulting dishes can be as disparate as an appetizer and a dessert, using exactly the same components.

Within the base oils and lubricants market, producers also have to come up with recipes for dealing with changing conditions, and this year, there have been surprise elements galore.

The unexpected and unfortunate factors that stand out are the devastating hurricanes in the third quarter that affected vast areas where many production plants are located, along with the critical consequences they brought to the industry overall.

Several manufacturers were forced to shut down production, and most had to cope with serious issues affecting their employees, but also with feedstock supply disruptions and logistical problems.

The way each market participant dealt with these adverse circumstances was unique and led to different results in terms of product supply levels and pricing.

Two large base stock suppliers declared force majeure on production and implemented allocation plans.

A majority of base oil producers, both on the paraffinic and naphthenic sides, implemented price increases between mid-October and early November. But at least a couple of them-Motiva and ExxonMobil-abstained from adjusting prices on API Group II/II+ offerings, marking a bit of a divergence from previous industry price moves.

The amount of the increases and implementation dates varied considerably among suppliers.

Similarly, finished lubricant and additive manufacturers announced price hikes for their products, to be implemented in November and December, with the size of the increases and effective dates differing widely, as well.

Whether these efforts will render effective results is difficult to predict, but they all required a certain amount of originality and stamina to stir the unexpected into the operations mix.

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