JW Introduces Lubricant Pricing Reports

JobbersWorld Announces Lubricant Pricing Reports

JWMiniBooks-3THE REPORTS provide insights and information on finished lubricant prices and an in-depth analysis of the cost drivers responsible for the changes in lubricant costs and prices in the US market.

The Finished Lubricant Pricing Reports provide lubricant manufacturers and marketers with an independent source of information and insights on price changes at the manufacturer and retail levels and the key drivers behind the changes. In addition to the influence of crude and base oil, the reports analyze the impact of changes in the cost of lubricant additives, transportation, packaging, labor, and others.

Must have reports for manufacturers and marketers looking to understand price drivers and communicate the reasons for price increases to customers.


Total Lubmarine Introduces Newest Environmentally Acceptable Lubricant

Total Lubmarine has announced the introduction of a new grease product: BIO OG PLUS – an innovative addition to an already comprehensive Environmentally Acceptable Lubricant (EAL) range.

Specifically formulated for sensitive applications such as open gears and chains under high load, BIO OG PLUS mitigates the challenges of working in environments where water contamination is common.

On top of being an extreme pressure and adhesive grease, Lubmarine says, BIO OG PLUS’s biodegradable qualities allow owners, managers and operators of vessels to take a more environmentally considerate approach to lubrication. It is also a vital resource to those operating in areas requiring the use of EAL Lubricants, such as those working within jurisdiction of the US.

Anne-Sophie Vaucheret, Marine Technical Engineer at Total Lubmarine said of the new product: “We are very happy to bring a new product into our range – and this is something that our customers have been asking for. We pride ourselves on an ability to offer an end-to-end lubrication solution, and with BIO OG PLUS, all of our customer’s needs are covered.”

HollyFrontier Corporation Reports Quarterly Net Income

HollyFrontier Corporation today reported fourth quarter net income attributable to HollyFrontier stockholders of $521.1 million or $2.92 per diluted share for the quarter ended December 31, 2017 compared to $53.2 million or $0.30 per diluted share for the quarter ended December 31, 2016.

HollyFrontier’s President & CEO, George Damiris, commented, “In comparison to last year, HollyFrontier’s significant financial improvement for the fourth quarter reflects both better refinery operations and the improved macroeconomic environment. Additionally, Lubricants and Specialty Products had a strong fourth quarter led by the Rack Forward Business. We are excited about 2018 based on our improving refinery reliability, our positive outlook for both product cracks and crude spreads, as well as the growth potential of converting a higher percentage of base oil sales into finished products.” MORE

On the Wire and in the News

Neste appoints Brenntag as its new NEXBASE Group III base oils distributor in Greater China

Car manufacturers go all in on electric cars, raising specter of peak oil demand

Gen III Oil Corp. signs Term Sheet for CAD$72 Million Secured Credit Facility

More Price Increases and Valvoline Announces New Product

Phillips 66 and Total Lubricants Announce Increases

Phillips 66 Lubricants announced it will raise finished lubricant prices by up to 5%. The increase is effective March 5, 2018. Phillips attributes the increase to recent increases in raw material costs.

Total Specialties USA advised its customers of a 4 to 8% price increase on TOTAL branded lubricants. This increase is effective February 26th. Total attributes the adjustment to escalation in the costs of base oils, additives, and other raw materials used in the manufacturing of lubricants.

Allegheny Petroleum announced a price increase of $0.25 a gallon for all of its lubricant products ordered on or after February 26th.  The price adjustment is attributed to industry wide increases in the cost of raw materials.

As of today, the list of companies JobbersWorld reported on that have announced lubricant price increases in 2018 is shown below:

Announced Date
Effective Date
CAM2 1/12/2018 2/5/2018 6 to 10%
SOPUS Products (Shell Lubricants) 1/15/2018 2/19/2018 up to 5%
Advanced Lubrication Specialties (ALS)
1/16/2018 2/5/2018 6 to 10%
Sinclair Lubricants 1/17/2018 3/1/2018 up to 6%
Chemlube 1/18/2018 2/5/2018 $0.20 to 0.25/gal
Nu-Tier Brands 1/18/2018 2/19/2018 6 to 8%
Martin Lubricants 1/18/2018 2/16/2018 4 to 7%
Safety-Kleen 1/18/2018 2/19/2018 5 to 8%
Pinnacle Oil 1/19/2018 2/6/2018 6 to 10%
Royal Mfg 1/22/2018 2/26/2018 5 to 8%
ExxonMobil 1/22/2018 2/26/2018 up to 6%
Reliance Fluid Technologies (RFT) 1/22/2018 2/26/2018 5 to 9%
Chevron 1/22/2018 3/1/2018 up to 5%
Warren Distribution 1/24/2018 2/26/2018 6 to 9%
Smitty’s Supply 1/24/2018 2/12/2018 lubricants 6 to 10%
Greases 3cpp
Phillips 66 1/25/2018 3/5/2018 up to 5%
Total Specialties USA 1/26/2018 2/26/2018 4 to 8%
Allegheny Petroleum 1/26/2018 2/26/2018 $0.25/gal


Valvoline Introduces New Modern Engine Full Synthetic Motor Oil

valvpic1262018Valvoline, a leading worldwide supplier of premium branded lubricants and automotive services unveiled another innovative new product with the introduction of Valvoline™ Modern Engine Full Synthetic Motor Oil. This new product is specifically engineered to protect against carbon build-up in Gasoline Direct Injection (GDI), turbo and other engines manufactured since 2012.

ScreenHunter_4115 Jan. 26 19.07“For over 150 years, Valvoline has been at the helm of product innovation, meeting consumer needs with smart science and solutions. Our team is leading the industry with the launch of Valvoline Modern Engine,” said Heidi Matheys, Valvoline chief marketing officer. “As part of our full synthetic portfolio, Modern Engine will combat potential carbon build-up in newer engines – an issue that degrades vehicle performance. Most consumers are unaware that the issue even exists, even though it has the potential to impact roughly 100 million newer vehicles on the road today.”

The company says that engines in vehicles 2012 and newer are built smaller and more efficient than ever. As a result, they run hotter, and are more susceptible to developing Low Speed Pre-Ignition (LSPI) knocking due to abnormal combustion, as well as fuel and oil related carbon build-up.  These issues could lead to power and fuel economy loss – and ultimately, engine breakdown.

Commenting on the launch of Valvoline Modern Engine Full Synthetic Motor Oil, Fran Lockwood – chief technology officer at Valvoline, said: “Valvoline Modern Engine captures key learnings from extensive research on how motor oil formulation – namely oil properties and additive composition – not only influence but can actually help prevent the formation of carbon deposits in the newest engine models.

For more information on Valvoline Modern Engine Synthetic Motor Oil, please visit ModernOil.com.

Why the Third Round of Price Increases?


Why the Third Round of Price Increases?

PIC11142017Rev2Price increases are not unusual in the lubricants business. In fact, this year alone we have seen three rounds. In most cases the increases are somewhat predictable since they are often driven by changes in the price of base oil. This is logical since base oil accounts for about 85% of the volume of material in motor oil and roughly 50 to 60% of its cost. The balance of the cost of goods belongs to performance additives, which are also impacted by higher base oil prices.

With that as a backdrop, the current round of price increases are understandable since there has been close to a 4% increase in the price of base oils since the start of the second round of price increases in April of this year. In addition, Lubrizol announced a temporary surcharge for its additives from September 27 through December 31, 2017 due the events surrounding Hurricane Harvey and the impact on the infrastructure of the petrochemical industry.

There are, however, other factors taken into consideration when price increases push through on finished lubricants; some having a very important impact on the third round of price increases. One in particular is the cost of freight.

Truck11142017The cost of freight climbed significantly this year due to a number of issues. The one with the greatest effect has, and is expected to continue to be, a severe shortage of qualified drivers. According to a report by the American Trucking Association (ATA), the driver shortfall may reach 50,000 positions by the close of 2017. Further, if the current trajectory holds, it’s forecast to balloon to nearly 175 thousand by 2026. Trucking companies are working to address the shortages by offering hefty sign on bonuses, higher compensation, and other perks and benefits to gain and retain drivers. In addition, they are pouring money into recruitment and training programs, all of which are driving up the cost of freight.

Freight costs are also ramping up due to regulations. In particular, the preparation trucking companies are implementing to assure compliance to the new federal regulation that requires the use of electronic logging devices (ELDs). In short, ELDs are digital logging devices that monitor driver hours of operation and help assure drivers adhere to the hours-of-service regulations (limits on the number of hours they can drive). In addition to the expense of planning, and the hardware and software required to implement ELDs, the regulations are said to exacerbate driver shortages by reducing availability.

Another impact on shipping costs, brings us back to August, when JobbersWorld reported on CSX Rail (the country’s third largest railroad) restructuring to rationalize infrastructure and consolidate operations. With this, CSX made regional cut backs in personnel and hump tracks, bringing its ability to handle between 60 and 80 cars a day in some yards, to as few as 35 or even 15 cars a day. Adding to the cut backs, CSX has also changed some of the shipping patterns, which sends some cars north before heading south, adding to delays. These factors encouraged blenders, distributors and others to find an alternative, yet more expensive and/or time consuming, means of transporting necessary products.

Importantly, increases in the cost of shipping impacts both the inbound and outbound freight charges incurred by lubricant blenders and distributors. As an example, higher freight costs mean blenders pay more to transport base oils from the rack to the blender’s lube plant. In addition, the freight costs to bring in additives increased. Distributors also pay more on inbound freight to transport finished lubricants from the blend plant to their storage and distribution facilities. On outbound freight, both blenders and distributors can incur higher shipping costs (when not FOB) to move finished lubricants from their warehouses to the end-user, retailer, or installer. And make no mistake about it, although a marketer operating a private fleet may not share the same cost burden as those moving freight by common carrier, costs can also increase as they compete to hire and retain drivers in the shrinking pool of qualified professionals. Furthermore, they too are seeing higher costs due to more stringent regulations.

But there is more.

bottles11142017Although higher base oil prices and freight costs have a big thumbprint on the third round of finished lubricant prices in 2017, increases in the cost of packaging materials, including steel, resin and paperboard, were also seen this year. As an example, Greif, a global leader in industrial packaging products and services, announced an increase on the price of steel drums of 5%, effective March 2017. Greif attributed the increase to escalating raw material and other input costs. Although not specific to Greif, some blenders say that where they used to pay $23 to 25 for a 55-gallon drum in 2016, they are now looking at prices closer to $30 a drum.

The price of corrugated boxes also increased significantly in 2017. There are a myriad of reasons for the increase including, an explosion at an International Paper factory at the beginning of the year that reduced US paper production by 5%. In addition, increased demand for boxes to fulfill e-commerce transactions, increases in export demand, higher freight costs, investment to meet regulatory requirements, and increases in labor and energy also has an effect. One of the more recent increases underscoring the higher price of packaging came when Georgia-Pacific reportedly announced in September a $50 a ton price increase on linerboard and a $60 a ton increase on corrugated to take effect on October 10, 2017

Although the price of resin used to manufacture plastic bottles is slowly returning to normalcy, production and supply line interruptions cause by Hurricane Harvey took its toll on resin prices. Polyethylene producers pushed through two rounds of price increases from August to October. When taken together, these increases totaled close to $0.10 a pound.

Adding to the higher cost of drums, pails, quart bottles, cartons and other packaging materials, blenders and distributors are also seeing the cost to procure these materials increase circling back to the higher freight prices.

So for those asking why we are seeing a third round of lubricant price increases in 2017, the answer is complex and goes well beyond increases in the price of base oil. It includes the higher cost of additives, transportation, packaging, labor, and others. These cost increases are real, and producers and distributors typically pass them on, and maybe a little more to improve their margins, by increasing the price of their finished lubricant if they want to stay in business and remain healthy.

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