Imports of base oils in Brazil expected to maintain growth pace in 2024

Imports of base oils are expected to continue growing in Brazil throughout 2024. The National Agency for Petroleum, Natural Gas, and Biofuels (ANP) reported that 929,514 m³ of base oils were imported in 2023, up 9.46% from 849,153 m³ in 2022.

Investments in port infrastructure are crucial to ensure the increase in base oil imports, which arrive in the country via large vessels, especially at the Rio de Janeiro and Santos ports. In this regard, the Port of Rio recently received investments to expand import capacity through larger vessels, such as Panamax-type ships.

ICONIC, a national leader in the lubricants sector, invested heavily in deepening Rio Port’s draft and bolstering the supply of this critical raw material for the lubricant industry. Increasing the draft at the Rio port will allow ICONIC to double the volume of base oil traded over the next two years, compared to 2023.

Expanding the draft of the company’s berths in the Port of Rio de Janeiro and three other points in Guanabara Bay improves maneuverability, allowing larger vessels to dock in the region. The work was completed by the end of 2023, using the best practices for underwater rock removal available on the market, with complete safety, environmental protection, and compliance with competent authorities and inspection agencies.

“The draft expansion at the Port of Rio is a milestone for the lubricant sector. That is why ICONIC is proud to lead and sponsor this project, which had the support of the entire maritime and port community of Rio de Janeiro. The removal of underwater rocks in that stretch of Guanabara Bay will provide greater navigation safety, better maneuverability conditions, and the possibility of receiving large vessels, not to mention the legacy and positive impact that this initiative brings to all entities operating in that area of the Rio Port,” analyzes Márcio Aziz, director of operations at ICONIC.

The executive emphasizes that ICONIC uses this port section to receive imported base oils, not available in the Brazilian market: “The prospect of receiving larger and higher-capacity vessels makes us more competitive and increases the reliability of foreign supplies,” adds Aziz.

POST-PANDEMIC MARKET RECOVERY

It is important to highlight that Brazil is one of the world’s top importers of group II and III base oils. The country will continue to import base oils for a long time, as there is no domestic group III production, and group II production has stagnated at a much lower level than demand. The United States is the main supplier of this group of products.

The industry has been rebounding to address the pent-up demand issue for base oils after the pandemic,  characterized by port closures, rising costs, and compromised international logistics. Additionally, geopolitical events, like the conflict in Ukraine, can significantly impact pricing, potentially causing prices to surge irrespective of their availability, thus impeding their acquisition.

According to Marcelo Guimarães, executive manager of ICONIC BaseOil, the company’s base oil business unit, “Establishing a continuous supply for base oil imports is very important and means having a reliable pool of inputs to draw from for the manufacture of various products in the market, such as high-quality and high-performance motor lubricants, industrial oils, and metal processing fluids.”

More than 15 strategic sectors of the economy, such as agribusiness, depend on these imports and high-performance lubricants for use in machinery under extreme conditions. This process also supports national reindustrialization and aids the performance of the national fleet of light and heavy vehicles.

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