Major Chinese petrochemical producer Hainan Handi has switched from producing Group II base oils to Group III grades at its subsidiary Handi Fluid.
The decision was made in response to firmer demand for high quality base stocks in and outside of the country. The company has adopted Honeywell UOP's Unicracking technology and ExxonMobil's MSDW catalytic lube dewaxing technology at the 400,000 t/yr unit. It mainly produces Group III 4cst and 6cst, with quality on par with its South Korean counterparts.
Handi's production of fluid materials, including base oils, was recognised as a national-level green manufacturing integrated program by China's Ministry of Industry and Information Technology. Handi is lifting its total capacity to 1.5mn t/yr for fluid materials and 200,000 t/yr for white oils used in the pharmaceutical and food industries.
Handi Fluid is located in Hainan province's Yangpu Economic Development Zone, a national bonded zone and is integrated with a 300,000t oil terminal, the largest in Hainan province. It can outsource feedstock and sell processed products on a global scale.
China imported up to 1mn t/yr of Group III base oils during 2020-2022, mostly from South Korea and Middle Eastern countries. It has been cutting imports in line with a rise in supplies from domestic producers. The country's domestic capacity for Group III base oils will rise above 1mn t/yr, after including the output from Handi Fluid's facility, although insufficient orders may result in run rates below 50pc for most of the year.
