Brazil and Mexico face urgent needs for higher performing lubricants because available supply is not fully aligned with the needs of the two countries’ respective fleets, an industry insider told the ICIS Pan American Base Oils & Lubricants Conference in New Jersey earlier this month.
There are opportunities for raising the bar and improving the lubricant quality levels in Brazil and Mexico, Fabio Araujo, Lubrizol’s business manager for engine oils in Latin America, told the conference.
In Mexico, he said, close to 30% of the fleet requires API SP category engine oil but only about half of the available supply meets that requirement. In Brazil, more than 20% of the fleet requirement is for API SP, but almost no product is available locally meetings that need, he said, and there is also a shortage of API SN product for the nearly 40% of the fleet that requires it.
Both markets primarily follow industry engine oil specifications developed for North America by the International Lubricant Standardization and Approval Committee and the American Petroleum Institute. Their latest specs, ILSAC GF-6 and the companion API SP, came to market in May of 2020. Launched in 2010 for 2011 and older vehicles, API SN was designed to provide better high temperature deposit protection for pistons, greater sludge control and seal compatibility compared to previous categories.
Higher performing lubricants are important because they enable the introduction of new vehicle technologies, such as gasoline direction injection, Araujo said. Higher performing lubricants can help because they provide increasing levels of durability, along with improved fuel efficiency.
“Some of these fluids are also aftertreatment compatible, which helps to reduce emissions levels,” he said. New vehicle technologies can also help fleets in Latin American countries move to lower-viscosity engine oil grades, such as 0Ws and 5Ws, he noted.
“Think about a product line, and when you move towards higher performing lubricants, you have a big potential to reduce product complexity,” he said. “So there are a lot of benefits.”
He said Brazil’s monthly lubricant demand is estimated at 110,000 cubic meters or 99,000 metric tons per month. He noted that passenger car motor oil accounts for 30% of the lubricants consumed in Brazil, while heavy-duty motor oil accounts for 25%, industrial lubricants 24%, transmission fluids 15% and greases 3%.
In 2021, Brazil’s lubricant consumption reached 1.5 million cubic meters, or about 1.3 million metric tons, he said, about 9% up from 2020.
Araujo said the Latin American lubricants market suffered during the coronavirus pandemic as reduce car usage led to fewer engine oil changes. Lubricant demand was low in 2020, he said, and continued to be so in 2021. Just as the industry was returning to normal, the war between Russia and Urkaine impacted supplies, he said.
Latin America economies provedevery resilient and quickly rebounded from the impacts of the pandemic, he said. The Latin American automotive industry is among the world’s most important, with Mexico and Brazil leading the way, he said. Araujo noted that Brazil ranks eighty among global vehicle producers, sixth in global vehicle parc and seventh in new vehicle registrations, while Mexico is seventh for eproduction, eighth in parc size and 14th in registrations.
He said decarbonization is a key topic in both Mexico and Brazil. Brazil will most likely take a leadership role in biofuel, combined with an important degree of electrification, Araujo said. Mexico will most likely follow the United States’ lead in decarbonization due to their important commercial alliance, he noted.