03 December 2010 16:35 [Source: ICIS news]
NEW YORK (ICIS)--Group I base oil plants will persist because they alone can produce brightstock and paraffin wax, allowing some to survive competition from new Group II capacity, an industry consultant said on Friday.
“Brightstock and paraffin wax are selling for just as much as Group III base oils and can only be produced at a Group I plant,” said Amy Claxton, owner of My Energy, a US consultancy that covers lubricants, waxes and gas to liquids
Claxton made her comments during a speech at the 6th annual ICIS Pan-American Base Oils Conference.
“In 2010, earlier forecasts of tight brightstock supply became a self-fulfilling prophecy," she said.
Nonetheless, Group I will likely make up a smaller share of total base-oils production.
Group I base oil production made up roughly 60% of global supply in 2010, but was expected to be only 40% by 2020, as new Group II and III facilities are built.
As Europe is the largest producers of Group I base oils, facilities there would be the most likely to close, Claxton said.
The US is the largest supplier of Group II base oils. Group III base oils are mostly produced in Asia.
The ICIS Pan-American Base Oils Conference concluded on Friday.
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