09 October 2012 09:41 [Source: ICIS news]
DUBAI (ICIS)--Global demand for base oil is expected to be at around 36m tonnes/year in 2017, largely unchanged from current levels, a senior industry consultant said on Tuesday.
In 2011, global base oil demand was at 35.5m tonnes/year.
Lubricants demand has a strong correlation to global GDP, and generally tracks the movement in GDP growth, SBA Consulting managing director Stephen Ames said before delegates attending the ICIS Middle East Base Oils and Lubricants Conference in ?xml:namespace>
Global growth is currently being weighed down by the ongoing eurozone debt crisis and continued weakness in the US economy. The International Monetary Fund (IMF), which is the global financial stability watchdog, revised down its global GDP growth forecast for 2012 to 3.3% from 3.5% previously.
“According to IMF’s latest 2012 World Economic Outlook, a small decline in global demand is expected through 2013, and hereafter moderate growth, if not slowed by OECD [Organisation for Economic Cooperation and Development] fiscal issues,” Ames said.
Five years from now, the Asia-Pacific region is expected to account for almost 50% of the global lubricants demand, as the OECD [industrialised countries] share declines to less than one-third of the total, he said.
“Nonetheless, opportunities will prevail in emerging markets, and for advanced, high specification grades in all markets,” he said.
“The drivers of base oil demand are mainly external to the lubricants business, with clean fuels investments and the technology paradox having the greatest impact,”
New emissions regulations have driven the demand for clean fuels, which call for new hydrocracking investment, which will produce a potential feedstock for new Group II and Group II base oil operations, he said.
The “technology paradox” – which refers to lower cost of producing higher quality base oils – has prompted players to set up new Group II and Group III plants,
The conference ends on Wednesday, 10 October.
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