Weathering a Silent Storm
Many of the developments that affect base oils and lubricants are best described in terms of natural phenomena. When Chevron’s Pascagoula base oils plant came online in 2014, participants talked about a “tsunami” of product hitting the market. This July, during a webinar hosted by the Independent Lubricant Manufacturers Association, Colleen Murphy of Motiva said that the company’s leadership team referred to the COVID-19 pandemic as a “global hurricane.”
Just when you think the situation may be under control, something happens to upend everything again. In early June, the base oils market showed the first signs of recovery, having been pelted by a hail storm of pandemic-related effects since March. A sharp drop in fuel and lubricant demand on the back of stay-at-home orders, reduced manufacturing operations and supply chain disruptions, and deeply damaged consumer confidence were some of the challenges the industry faced.
As lockdowns and other pandemic-related measures eased and demand began to pick up, base oil suppliers introduced price increases on tight supplies and rising feedstock costs.