Lubricant Additive Prices on the Rise

Hang on to Your Hats – The New Year Starts off With Lubricant Additive Price Increases 

Afton Chemical was the first major additive company to recently move prices up when it announced on November 17th that it will increase the price on the majority of its performance additives by 5 to 7%. The increase went into effect December 15, 2017. Afton attributed the increase to the higher cost of raw materials and increases in transportation cost.

Others soon followed…

Lubrizol announced on December 19th it will implement a general price increase across all of its lubricant additive products effective February 1, 2018. The increase is reportedly driven by higher raw material and operating costs (including transportation, testing and labor). The amount of the increase are said to be product specific.

Infineum also announced on December 19th that it will implement a price increase.  The increase is effective January 10, 2018 and will move the price of most of Infineum’s additive products up by 5 to 8%. Infineum attributes the increase to the escalating cost of raw materials and the higher cost required to maintain consistent supply.

MidContinental Chemical Company (MCC) announced on December 20th that it will implement a price increase for Chevron Oronite, OLOA, and Paratone branded additives. This increase is effective on orders shipped on or after January 22, 2018. MCC attributes the increase to the recent increases in the cost of feed stocks, raw materials, intermediates, and higher transportation costs.

PIC11142017Rev2In addition to the higher cost of raw materials, another common thread among the additive price increases is the impact the higher cost of transportation is having on the industry. It’s important to consider that the cost to transport goods in the US increased significantly in 2017 and little relief is expected in the upcoming year.

In addition to driving up the cost of lubricant and fuel additives, higher freight costs have been a key factor in pushing up the price of finished lubricants in 2017. In fact, a number of lubricant blenders have reported that the cost to transport product has moved up 30 to 35% since the start of 2017.  See the November 15th issue of JobbersWorld for more about the factors driving up the price of finished lubricants. CLICK FOR MORE

Lubricant Additive Prices Increase

Lubrizol announced it will increase the price of its additives in most product segments by 7% effective March 20, 2017.

Infineum USA announced an increase for most of its lubricant additives by up to 4%. The Infineum increase is effective February 27, 2017. Both Lubrizol and Infineum attribute the increases to significantly higher cost of raw materials.

For those unfamiliar with lubricant blending, additives (DI and VI) account for roughly 15% of the volume of material used to make a quart of motor oil and roughly 50% of the additive is base oil used as a diluent/carrier for the additives. Based on the recent increases in the price of base oils alone, it becomes clear why additive prices are moving up. Factors driving the increases become even more apparent when one looks at how the price of other raw materials used in additive manufacturing have risen over the past year.

When taken together, the recently announced increases in the price of base oil and additives are pushing the price of finished motor oils up by roughly 40 to 50 cpg in the first quarter of 2017. But the higher cost of base oil and additives alone do not tell the full story. This is because lubricant manufacturers are also seeing higher costs on packaging, transportation, and other raw materials and operating costs.

So hang on to your hat. It looks like 2017 is off to an interesting start.

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