EuroWire July 2021

Corporate News

Reacting to global lubricant crisis In recent weeks, the global lubricant market has witnessed its biggest ever challenge – the massive worldwide reduction in the use of fossil fuels (due to COVID-19) has created a vacuum in the supply chain of base oils, a by-product of fuel. These base oils used to create lubricants are now in scarce supply or simply unavailable, impacting massively on manufacturing across the board, writes Chris Nettleship, technical director at Metalube Ltd. ▲ Metalube is researching product variants that avoid the most severely affected base oils

scramble to secure any material that does make it to market. What were once commodities, in a highly competitive market, are now highly prized specialities sold to the highest bidder. In some applications these short-term supply issues can, in part, be overcome by delaying lubricant changes. Although not ideal, the option of extending the life of oils in gearboxes or hydraulic systems is a pragmatic one, when faced with either paying double or triple the price for fresh oil or being unable to purchase it at all. For other applications, such as wire and tube production, where the lubricant is both a critical part of the process and is consumed during it, this is not an option, so the supply problems are much more immediate. Many lubricants applied in wire and tube drawing processes have historically used the heavier base oils that have experienced the most significant supply disruption. Despite the already dwindling supply, there had been little incentive to consider other, more modern but often more expensive options – the prevailing sentiment being that it was tomorrow’s problem, not one for today. COVID and the“new normal” that the world will adjust to have now changed that. While the supply issues are undoubtedly at their most acute now, it appears unlikely that the base oil supply landscape will revert completely to that of pre-COVID times. Manufacturers of wire and tube will be forced through necessity to reconsider the choice of lubricants for their processes. Metalube’s new chemistries and products will therefore not be a short-term fix but a long-term solution in advancing lubricant technologies. Metalube Ltd www.metalube.co.uk

around 1 per cent of refinery output going into the lubricant market as base oil. In simple terms, refineries produce fuels and base oil is a by-product. A further complicating factor is that not all oil refineries are equal. The newer generations of these refineries use more advanced techniques (such as hydrocracking) to produce higher fuel yields from the crude, maximising the return on investment (in normal times). The side effect of this is that the base oil by-products are also more refined with higher purity, which is good news; but the bad news is that during hydrocracking the “heavy” oils are broken down and only light oils are produced. Many older refineries have been closed due to being uneconomic, so the supply of heavier oils used in wire and tube lubricants has been dwindling. The collapse in fuel consumption caused by COVID means that refineries are either shut down entirely or running at significantly reduced output. Even though demand for materials such as base oils is high, without the outlet for the fuels the refineries simply cannot operate: they have no way of storing the substantial amount of excess fuel that they would produce. The high demand coupled with the scarcity of supply is creating disruption in the base oil market, as companies

Metalube’s research and development team is now bringing to market new product variants that avoid the most severely affected base oils. Additionally, new future-proof chemistries are completing the laboratory development stage and are available for phase-1 field testing. COVID-19 has significantly impacted our travelling habits, with our roads and skies enjoying decreased traffic, resulting in the reduction in the use of fossil fuels. This is great for the environment, but travel changes have had a hidden, but massive, impact on the production of almost all lubricant products, including those used in the manufacture of wire and tube. To understand why requires us to delve a little into the chemistry of the products and the processes by which they are made. The key building blocks for most lubricant products are the base oils. These can form up to 80-90 per cent of a typical lubricant and are therefore critical to being able to manufacture the finished product. Although the global base oil market is, in absolute terms, very substantial (with sales revenues of almost $30bn) it is actually a very small part of the output of crude oil refining. The overwhelming majority of crude oil is converted into fuels such as gasoline, diesel and kerosene, with only

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July 2021