22 February 2013 21:11 [Source: ICIS news]
LONDON (ICIS)--Group II base oils are likely to become the dominant lubricant basestock in Brazil, according to Sergio Rebelo of Kline & Company’s Brazilian affiliate in South America.
Speaking at the 17th ICIS World Base Oils conference in London on Friday, Rebelo said, “We believe Group II will be the winning product in Brazil over the next few years.”
“The average fleet age in Brazil is decreasing,” Rebelo added.
This encourages more use of Group II because the newer vehicles are more likely to require premium grade motor oil than older models.
Additionally, Group II base oils are now routinely entering Brazil from North America as base oil prices in the US fell sharply in the second half of 2012.
In terms of spot prices, Group I 100 grade base oils were last assessed at $3.20/gal FOB (free on board) US Gulf for material likely to be put to the export market.
Group II 100 viscosity grade was last assessed at $3.05/gal FOB US Gulf, reflecting the type of price option that might be achieved on Group II material from the US.
Brazil dominates South America’s economic statistics, claiming well over half of the population of the entire region and nearly 60% of the regional GDP.
South America in general and Brazil in particular has a major basestock deficit, according to Rebelo.
Brazil has 7% of the global lubricants demand and 47% of the South American lubricants demand, making the country a significant net importer of base oils.
The base oils conference ends on Friday, February 22 in London.
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