03 December 2009 18:47 [Source: ICIS news]
NEW YORK (ICIS news)--Despite growing concerns over the future of Group I base oils capacity as the industry moves towards higher specification material, some plants in North America will remain open due to a need to maintain production of certain grades and by-products, said Terry Hoffman, director of base and process oils sales for Valero.
Speaking at the 5th annual ICIS Pan American Base Oils and Lubricants conference, Hoffman said that there were a number of factors which would continue to promote demand for Group I base oils.
While technical demand for motor oils is increasingly requiring higher specification oils such as Group II+ and Group III, Hoffman stressed that industrial lubricants which do not require these higher specifications still account for 50% of demand .
Meanwhile, Group I plants also have the advantage of having the ability to produce heavier grades such as brightstock.
Finally, demand for by-products of Group I production, such as slack wax and micro wax, will ensure that some units will continue to run.
However, Hoffman added that while these factors would continue to promote demand for Group I production, base oil plant closures are often based on wider refinery economics.
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