05 December 2013 17:32 [Source: ICIS news]
JERSEY CITY, US (ICIS)--Group I base oils “keep hanging on” due to economic and market advantages the product type continues to enjoy in many parts of the world, an industry consultant said on Thursday.
“The sky is not falling,” said Amy Claxton, CEO of My Energy consultancy, during a presentation at the ninth ICIS Pan-American Base Oils & Lubricants Conference.
“Group I plants are profitable, fully depreciated assets,” she added.
Group I’s margins are benefiting from the base oil type’s by-products such as paraffin wax and bright stock, Claxton said.
Also, the growing need for higher-quality base oils such as Group II’s and Group III’s will result in a contraction of nameplate capacity of those but not so for Group I’s, she said.
Meanwhile, China’s continued thirst for base oils – with demand remaining ahead of supply through 2025 – will keep Group I’s as part of the answer, Claxton said.
The ICIS Pan-American Base Oils & Lubricants Conference continues through Friday.
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