Calumet to complete US base oils expansion in Q4

02 March 2007 23:53  [Source: ICIS news]

SANTO DOMINGO (ICIS news)--Calumet Specialty Products said on Friday that its expansion at its Louisiana refinery at Shreveport would be completed in the fourth quarter of 2007, instead of the third quarter as previously predicted.

The expansion includes all paraffinic base oils, waxes and fuels. Calumet will add 15,000 bbl/day of crude capacity, 6,000 bbl/day of Group II base oil production, as well as 1,000 bbl/day of new wax volume.

All 40-700 viscosity base oil volumes at the Shreveport plant will increase an average of 50%. The bulk of the new base oil capacity will result from dedicating the Iso-dewaxing unit (IDW) to 100% base oil production. Additionally, a hydrofinisher will be added to this unit for color improvement and product stabilization.

Once the expansion is completed, Calumet will produce nearly 30,000 bbl/day of specialty lubes, waxes and solvents.

It was not yet clear how the additional capacity would impact the US base oils and paraffin wax markets.

Paraffin wax consumers speculated that the added capacity might exert downward pressure on pricing. Paraffin wax prices softened in mid-January as they succumbed to downward pressure from ample availability and competitive activity among suppliers.

However, prices stabilised in late February. Despite the presence of a few aggressive offers, both for slackwax and fully refined wax, competitive situations were less frequent than earlier in the year, industry sources said.

Slackwax prices were near 30 cents/lb FOB (free on board) USG (US Gulf) and slightly above, according to global chemical market intelligence service ICIS pricing. Fully refined wax values held in the mid-to-high 40s cents/lb for 125°Fahrenheit to 140°F melt point material.

US paraffin wax producers include IGI, Calumet, ExxonMobil, Citgo, American Refining, and Ergon, among others.

By: Gabriela Wheeler

+1 713 525 2600

By: Staff Reporter
+44 20 8652 3214

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