03 December 2010 17:03 [Source: ICIS news]
NEW YORK (ICIS)--Full line lubricant marketers will ultimately have to inventory all three base oil groups amid tightening automotive specifications, an industry expert said on Friday.
“The migration to Group II base oil-based, heavy-duty motor oil formulations is driven by the general transition to tighter automotive specifications, but also availability of the Group II base stocks by region,” said Brent Lok, a global marketing manager for base oils with Chevron.
Lok spoke at the 6th annual ICIS Pan-American Base Oils Conference in New York.
Group II base oils can be used in 97% of all applications, while Group I is unable to meet modern automotive specifications and Group III is too light for many lubricant applications, Lok said.
In North America, Group II is the core base oil with 10.5m bbl of capacity expected by 2015, allowing it to pass Group I as the region's preferred lubricant. Group III base oils continue to be imported as correction fluids.
There is a slow transition to premium products in Latin America, but it is growing, Lok said. Group I producers remain the core suppliers in that region, he added.
Meanwhile, Group I base oils will also remain the core base oil supply in Europe as there is large in-region supply and high barriers to entry for premium base oils, Lok said.
Asia is transitioning to premium products and growth is being satisfied with more and more Group II base oil capacity, but large demand for Group I base oils will continue, he said.
The conference concludes on Friday.
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