20 February 2012 00:00 [Source: ICB]
South America's lubricant market is estimated to be about 2.25m tonnes across seven countries, with Brazil, Argentina and Venezuela the three largest, and Chile, Colombia, Peru and Ecuador accounting for smaller volumes. Brazil alone accounts for around one-half of finished lube demand in South America.
The base oils market in Mexico and central America is assessed at about 900,000 tonnes by regional base oil market players.
Production capacities in South America are shown in the accompanying table. In Mexico and central America, production consists solely of state oil concern Pemex's unit at Salamanca, Mexico, with 6,000 bbl/day of Group I output.
Brazil's oil major Petrobras has recently announced its intentions to build a Group II base oil plant at the planned Complexo Petroquimico do Rio de Janeiro (COMPERJ) refinery in Itaborai, a city in the state of Rio de Janeiro. The base oils portion of the project is expected to come on stream in 2016.
THE LUBRICANT LIFE-CYCLE
At the ICIS Pan American Base Oils and Lubricants conference, held in Jersey City, New Jersey, US, in December, speaker Carlos Roberto Martins Barbosa, special products trading general manager for Petrobras, pointed out that the lubricant life-cycle in Brazil is slower than in the US and Europe.
He explained that the country's access to "base oil-friendly" paraffinic and naphthenic crude at a competitive cost offers good advantage in the production stream, including the production of high-value products such as fully refined paraffin wax (including micro-crystalline), brightstock and safe oils.
Barbosa added that about 75% of automotive engine lubricants are 15Wxx or higher, and about 27% of the overall market consists of regular industrial lubricants.
Brazil's fuel distributors sold more diesel than gasoline in 2011, according to fuel distributor union Sindicom. Together, Sindicom's associated companies, representing about 80% of the domestic market, sold a volume of 87.4bn liters (23.1bn gallons) of fuels in 2012, including 43bn liters of diesel and 35.3bn liters of gasoline.
Diesel demand is said to hold growth potential for 2012 as the Brazilian truck fleet adopts new technology that uses diesel with lower sulphur levels, beginning in January.
Alongside this, ExxonMobil Basestocks announced in September 2011 that it has selected COSAN, a Brazilian energy conglomerate, as an official distributor of its Group I and II base stocks in Brazil and Australia.
In Argentina, according to ICIS Pan American speaker Monica Graziela Vazquez, technical service and OEM manager for Spanish oil major Repsol YPF, the most recent assessment of the country's automotive industry put domestic production at 716,540 units in 2010.
Vazquez's figures as of October 2011 showed passenger car and light vehicle unit sales at 724,435 and commercial vehicle sales at 32,178 units. A further breakdown given by Vazquez shows that 60% of Argentina's lubricant sales are automotive products, while 38% are industrial and 2% are greases.
One issue gaining attention in Argentina is the push to control cetane number and sulphur content in diesel fuel. Within this effort, Argentina is considering a B10 (10% bio-diesel, 90% petro-diesel) mandate for 2012, according to Vazquez.
"Argentina has been using FAME [fatty acid methyl ester biodiesel] since January 2010 at the B5 level," she said. "We are [now] looking at the B10 for passenger cars, but are not yet finished with the lubricant tests," Vazquez added.
"Environmental protection is becoming a relevant issue in Argentina because of the fast impact of global quality changes in base oils and lubricants," she added. The country also has B30 testing underway for its light vehicles.
Argentina's interest in biodiesel is slated to push the country's production past that of Brazil and France, according to consultancy Santiago & Sinclair of Argentina. The surge, expected by the end of 2011, would make the country the third largest biodiesel producer in the world, following Germany and the US.
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