Embed Size (px)
Citation preview
Competition complexity and regulationEurope base oils market braces for 2019 challenges
Vicky Ellis amp Sarah Trinder
Senior Editor Managers ICIS
wwwiciscom 2
Brief introduction to ICIS methodology
Major European price trends snapshot of Asia US
Competition complexity amp regulation in 2018 amp 2019
Agenda
wwwiciscom 3
Competition - Group I II III
Complexity ndash Group III
Regulation - Group I II
Competition complexity and regulation
IMAGE Steve CargillracingfotoscomREXShutterstock
wwwiciscom 4
Anglo-Dutch public company on the FTSE-100
operating in 40 countries with revenues close to
pound7bn in 2016
Legal and risk solutions
Worldrsquos leading events
organizer
Scientific
Technical and
Medical
Business analytics
ICIS and our methodology
wwwiciscom 5
Since 2011 ICIS has worked with global regulatory body IOSCO to create rules over price assessment activities
The IOSCO principles are embedded into the policies and practices of the ICIS editorial team
ICIS has passed all its independent audits most recently by PricewaterhouseCoopers in October 2018
Methodologies go through a consultation every three years
A pioneering compliance programme
Price assessment process
Contact ndash calls emails ICE
keep detailed notes in call
records 5pm deadline for
information
Carry out price assessment
based on market feedback
according to methodology file
report and news
Reports amp news copy-
edited publication
weeklydaily depending on
frequency
01
02
03
wwwiciscom 7
Key information shared with ICIS market editors
Price eg euro250tonne
Counterparty eg sold to trader A bought from producer B
Size of trade eg 1000 tonnes 2000 tonnes
Loading date eg March loading 15-31 June loading
INCO terms eg FOB basis
Date trade carried out Or period in which price applies eg as of 1 November
ICIS pricing methodology ndash information parameters
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 2
Brief introduction to ICIS methodology
Major European price trends snapshot of Asia US
Competition complexity amp regulation in 2018 amp 2019
Agenda
wwwiciscom 3
Competition - Group I II III
Complexity ndash Group III
Regulation - Group I II
Competition complexity and regulation
IMAGE Steve CargillracingfotoscomREXShutterstock
wwwiciscom 4
Anglo-Dutch public company on the FTSE-100
operating in 40 countries with revenues close to
pound7bn in 2016
Legal and risk solutions
Worldrsquos leading events
organizer
Scientific
Technical and
Medical
Business analytics
ICIS and our methodology
wwwiciscom 5
Since 2011 ICIS has worked with global regulatory body IOSCO to create rules over price assessment activities
The IOSCO principles are embedded into the policies and practices of the ICIS editorial team
ICIS has passed all its independent audits most recently by PricewaterhouseCoopers in October 2018
Methodologies go through a consultation every three years
A pioneering compliance programme
Price assessment process
Contact ndash calls emails ICE
keep detailed notes in call
records 5pm deadline for
information
Carry out price assessment
based on market feedback
according to methodology file
report and news
Reports amp news copy-
edited publication
weeklydaily depending on
frequency
01
02
03
wwwiciscom 7
Key information shared with ICIS market editors
Price eg euro250tonne
Counterparty eg sold to trader A bought from producer B
Size of trade eg 1000 tonnes 2000 tonnes
Loading date eg March loading 15-31 June loading
INCO terms eg FOB basis
Date trade carried out Or period in which price applies eg as of 1 November
ICIS pricing methodology ndash information parameters
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 3
Competition - Group I II III
Complexity ndash Group III
Regulation - Group I II
Competition complexity and regulation
IMAGE Steve CargillracingfotoscomREXShutterstock
wwwiciscom 4
Anglo-Dutch public company on the FTSE-100
operating in 40 countries with revenues close to
pound7bn in 2016
Legal and risk solutions
Worldrsquos leading events
organizer
Scientific
Technical and
Medical
Business analytics
ICIS and our methodology
wwwiciscom 5
Since 2011 ICIS has worked with global regulatory body IOSCO to create rules over price assessment activities
The IOSCO principles are embedded into the policies and practices of the ICIS editorial team
ICIS has passed all its independent audits most recently by PricewaterhouseCoopers in October 2018
Methodologies go through a consultation every three years
A pioneering compliance programme
Price assessment process
Contact ndash calls emails ICE
keep detailed notes in call
records 5pm deadline for
information
Carry out price assessment
based on market feedback
according to methodology file
report and news
Reports amp news copy-
edited publication
weeklydaily depending on
frequency
01
02
03
wwwiciscom 7
Key information shared with ICIS market editors
Price eg euro250tonne
Counterparty eg sold to trader A bought from producer B
Size of trade eg 1000 tonnes 2000 tonnes
Loading date eg March loading 15-31 June loading
INCO terms eg FOB basis
Date trade carried out Or period in which price applies eg as of 1 November
ICIS pricing methodology ndash information parameters
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 4
Anglo-Dutch public company on the FTSE-100
operating in 40 countries with revenues close to
pound7bn in 2016
Legal and risk solutions
Worldrsquos leading events
organizer
Scientific
Technical and
Medical
Business analytics
ICIS and our methodology
wwwiciscom 5
Since 2011 ICIS has worked with global regulatory body IOSCO to create rules over price assessment activities
The IOSCO principles are embedded into the policies and practices of the ICIS editorial team
ICIS has passed all its independent audits most recently by PricewaterhouseCoopers in October 2018
Methodologies go through a consultation every three years
A pioneering compliance programme
Price assessment process
Contact ndash calls emails ICE
keep detailed notes in call
records 5pm deadline for
information
Carry out price assessment
based on market feedback
according to methodology file
report and news
Reports amp news copy-
edited publication
weeklydaily depending on
frequency
01
02
03
wwwiciscom 7
Key information shared with ICIS market editors
Price eg euro250tonne
Counterparty eg sold to trader A bought from producer B
Size of trade eg 1000 tonnes 2000 tonnes
Loading date eg March loading 15-31 June loading
INCO terms eg FOB basis
Date trade carried out Or period in which price applies eg as of 1 November
ICIS pricing methodology ndash information parameters
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 5
Since 2011 ICIS has worked with global regulatory body IOSCO to create rules over price assessment activities
The IOSCO principles are embedded into the policies and practices of the ICIS editorial team
ICIS has passed all its independent audits most recently by PricewaterhouseCoopers in October 2018
Methodologies go through a consultation every three years
A pioneering compliance programme
Price assessment process
Contact ndash calls emails ICE
keep detailed notes in call
records 5pm deadline for
information
Carry out price assessment
based on market feedback
according to methodology file
report and news
Reports amp news copy-
edited publication
weeklydaily depending on
frequency
01
02
03
wwwiciscom 7
Key information shared with ICIS market editors
Price eg euro250tonne
Counterparty eg sold to trader A bought from producer B
Size of trade eg 1000 tonnes 2000 tonnes
Loading date eg March loading 15-31 June loading
INCO terms eg FOB basis
Date trade carried out Or period in which price applies eg as of 1 November
ICIS pricing methodology ndash information parameters
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Price assessment process
Contact ndash calls emails ICE
keep detailed notes in call
records 5pm deadline for
information
Carry out price assessment
based on market feedback
according to methodology file
report and news
Reports amp news copy-
edited publication
weeklydaily depending on
frequency
01
02
03
wwwiciscom 7
Key information shared with ICIS market editors
Price eg euro250tonne
Counterparty eg sold to trader A bought from producer B
Size of trade eg 1000 tonnes 2000 tonnes
Loading date eg March loading 15-31 June loading
INCO terms eg FOB basis
Date trade carried out Or period in which price applies eg as of 1 November
ICIS pricing methodology ndash information parameters
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 7
Key information shared with ICIS market editors
Price eg euro250tonne
Counterparty eg sold to trader A bought from producer B
Size of trade eg 1000 tonnes 2000 tonnes
Loading date eg March loading 15-31 June loading
INCO terms eg FOB basis
Date trade carried out Or period in which price applies eg as of 1 November
ICIS pricing methodology ndash information parameters
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Europe base oils trends
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Group I base oils ndash backdrop
Group I capacity rationalisation of 15m tonnes around 2015
Left market less able to deal with unexpected outages peaks in demand
Brightstock supply tight due to lack of alternative products
Lighter grades less affected due to substitution opportunities
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Europe Group I prices 2018
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Key takeaways for 2018
Brightstock prices on separate trajectory because of tight supply tenders
Group I SN150 SN500 seeing competition from Group II product
Ample supply across all regions impacting Europe
No real impact from higher upstream costs as yet
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
2016
good supply amp competition
strong euro in April
imports from APAC
Group I formula-linked dip
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
2016
good supply ampcompetition
strong euro
drives down prices
2017
Tight supply in Europe H1
Spring TAs in US Asia
Waterfall effect Qatar GTL
Europe Group II 2016-2018
2018
More stability
Ceiling of GI prices
Crude volatility
Healthier supply
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 15
Price trends
Approvednon-approved spread
Russian Abu Dhabi material pressuring non-approved market
SK Lubricants delays 2018 Indonesia TA to 2019
Supplydemand
Mixed longer non-approved supply
No Shell GTL impact Imports continue to flow
Trend towards GIII from GI
GROUP III - 2018
IMAGE Design Pics IncREXShutterstock
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Historical GIII price spread
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Snapshot of US base oils
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Group I
Group II
Group III
Shrinking market
Dominant market
Gaining increasing market
share
US market backdrop 2018
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
US price movements 2018
Posted prices increase assessed values stable-to-weak
Group IIIII prices in particular seeing weaker numbers despite upstream costs
Group III values at premium to Group III
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
US Group III outlookGroup II base oils remain
workhorse base stock of industry as able to fulfil 97 of motor oil requirements
Group I base oils face uncertainty amid shift to light viscosity low sulphur oils
Changes in IMO regulations present challenges for Group I base oils
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Snapshot of Asia base oils
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 22
Asian base oils
Margins wider in late 2017
Spread erodes
Gasoil up on crude
Base oils GI SN500 export eases
GII 500N down
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Asian base oils 2018 amp 2019
Group I
SN150 supply in question on changeover from GI to GII may ease
SN500 amp brightstock supply ample on inventory buildup
Group II
Past seasonal price trends have been disrupted in recent years due to turnarounds so outlook unclear
Producers have been monitoring output amid firm crude futures
Group III
Middle East product expected to be continuing presence on new plants
Demand expected to be steady as buyers are well stocked
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Competition amp complexity
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Europe Group I outlook ndash competition with other base stocks
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
ExxonMobil Rotterdam Expansion ndash what we dodonrsquot know
DO KNOW Commercial production due to start in Q1 2019
DO KNOW Expanding global slate of base stocks with introduction of a heavy neutral Group II base stock EHC 120
DO KNOW Collaboration with additive companies during the project pre-marketing period
DO KNOW ExxonMobilrsquos customers to take advantage of Rotterdamrsquos products EHC 50 and EHC 120 as soon as they are commercialised in 2019 the company said
DO KNOW New grade joins EHC 110 a heavy neutral base stock for the Asia market and three light-to-medium neutrals ndash EHC 45 and EHC 65 available in the Americas and EHC 50 for Asia and soon for EAME
DONrsquoT KNOW Official capacity
DONrsquoT KNOW Whether the plant will run at full capacity at first
DONrsquoT KNOW What percentage of capacity will be used internally
DONrsquoT KNOW Whether this product will directly compete with offerings from the US
DONrsquoT KNOW If a Group II European export market will evolve as a consequence
DONrsquoT KNOW If further Group I capacity closures will ensue
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Europe Group I outlook ndash further rationalisation
Total refinery
Gonfreville
Capacity halved to
260000
tonnesyear GI
product
Colas refinery
Dunkirk
260000
tonnesyear GIGIII
product
2013 20152017
2016
Shell refinery
Pernis
370000
tonnesyear GI
product
Further GI
rationalisation on
the horizon
Kuwait Petroleum
Europoort
Gunvor
Petroleum
Rotterdam
17m bblsyear
January
2016April 2015
November
2015February
2016
2019
onwards
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Group II in Europe ndash key 2018 themes
Competition heating up
bull XOM commercial supply 2019
bull Chevron is dominant importer
bull Re-refiners moving into GII III
bull Motiva imports via distributor
bull ME Asia volumes from
Aramco Luberef
Domestic supply backdrop
bull No sizeable domestic supply
was hurdle for wider adoption
bull Price of imports crept up after
gaining market share
bull Small Lotos volumes
bull SK-Repsol - some captive use
Watch wait prepare
bull No big changes until late 2018
bull ExxonMobil groundwork for
Group II plant at Rotterdam
bull Capacity yet to be confirmed
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 30
US a key influence
Premiums over Group I
Feedstock trends lag (US moves quicker than Europe)
Local re-refined supply
Demand expected to rise ahead of ACEA 2016 deadline (1 Dec 2018)
Availability boosted in Q2
Saudi Asian offers added psychological pressure
GROUP II ndash price drivers 2018
IMAGES Jim YoungAPREXShutterstock ETIENNE LAURENTEPA-EFEREXShutterstock
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Group II competition heats up in Europe
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 32
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 33
Split views (skip straight to GIII)
The ldquoworkhorserdquo ndash ExxonMobil
Price trading places with Group I
The ldquoNewrdquo Group III (for the price spread)
Group II ndash what lies ahead
IMAGE Action PressREXShutterstock
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 34
Similar for 2018hellip BUT
Demand shift
Timing key for supply
Prices may delay a changeover for some consumers
GROUP II ndash 2019 drivers
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Europe Group I outlook ndash upstream influences
Brent crude oil breaches $85bbl in October
Brent crude values plummet in November
VGO prices follow upstream trends
Influence yet to be seen in downstream base oils market
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Europe Group I outlook ndash possible saving graces
Group I
Brightstock
production
Co-product
waxes
Older vehicle
fleets
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 37
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 38
Price range splits
Multi-tier market
Imports battling with domestic supply
GROUP III - 2018
IMAGE Geert WeggenSolent NewsREXShutterstock
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Abu Dhabi Group III deal for Europe
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 40
Price trends
Approvednon-approved battle to continue
Demand seen strong for approved
Turnarounds SK Lubricants amp S-Oil
Trend towards GIII from GI
GROUP III - 2019
IMAGE APREXShutterstock
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Regulation ndash ACEA 2016 amp IMO 2020
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 42
Key date Until 01122018 products with formulation according to ACEA 2012 may be sold
Affects Service fill oils for gasoline engines light-duty diesel engines engines with aftertreatment devices and heavy-duty diesel engines
Extra measures against the impact of biofuels and upgrading hardware and structure for the sequences to keep up with changes in engine technology and lubricant developments ndash Lubrizol white paper
ACEA ATC and ATIEL CEC aim for ldquoimproved fit-for-purpose engine lubricants that meet the increasing technical requirements of the automotive industryrdquo
ACEA update httpwwwaceabenewsarticleacea-oil-sequences-2016
ACEA 2016 Oil Sequences
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Until 31 D
ecem
ber
2019
ship
s o
pera
ting o
uts
ide
EC
As
can u
se f
uel o
il of
35
s
ulp
hur
conte
nt
1 J
anuary
2020
onw
ard
ship
s w
ill h
ave
to u
se f
uel oil
with
su
lphur
conte
nt
of no
more
than 0
5
Change in o
pera
ting
meth
ods t
ow
ard
s
low
er
loads
Change in
engin
e
technolo
gie
s
additio
n o
f
lsquoscru
bbers
rsquo
Div
ers
ificatio
n o
f fuels
Change in
lubric
ants
used in
marin
e s
ecto
rs
Marpol regulationsWhat do the Marpol regulations mean for the shipping industry and lubricant producers
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
IMO ndash an uncertain future
Refinersrsquo offerings unclear
Lubricant approvals from OEMs yet to be declared
Vessel operator intentions hazy
Shipowners face logistical pressure of where to load fuel and find lubricants to match
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
What does this mean for marine lubricants
Engine oils most likely to be affected
Players suggest 25-40 base number (BN) lubricants will dominate
Marine industry adapting to Group II base stocks Group I still very popular but with additives GII can overcome build up of deposits
Shipowners trialling different technologies
New lubricants emerging
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
wwwiciscom 46
Base oils market 2019 ndash future trends
Leapfrogging Group II
Automotive shift towards GIII
Crude 2018 rollercoaster poses 2019 question
How does upstream grapple with
Greater volatility
What is the growth in traditional end markets
Cleaner bunker fuel Evshydrogen fuel cell
Old versus new uses
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Contact us
Vicky Ellis
Senior Editor Manager
Europe base oils ndash Domestic GIIIIII
vickyellisiciscom
Sarah Trinder
Senior Editor Manager
Europe base oils ndash Export GI
sarahtrindericiscom
Thank you
Thank you
