Full Synthetic Costs

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Just curious why you only quote 55 gallon drum or more. Any serious company would be buying in 1000's of drums of the stuff which could be a huge difference in price. Also why is the additive package so much? Are you double counting for the esters? If not, what is in the additive package that is different than say a Castrol GTX that sells for about the price of your additive package?
 
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And in the case of Mobil, they would be the supplier of PAO and esters so it makes sense they can price their synthetic like they do. Say as in comparison to Amsoil or Redline etc.
 

MolaKule

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"Just curious why you only quote 55 gallon drum or more. Any serious company would be buying in 1000's of drums of the stuff which could be a huge difference in price. Also why is the additive package so much? Are you double counting for the esters? If not, what is in the additive package that is different than say a Castrol GTX that sells for about the price of your additive package? " This was a quick and dirty example with ballpark figures to give you a rough idea of costs. Neither myself or anyone will make their costs public because each company has their own specific cost structures, etc. Some small specialty blenders may indeed buy 55 gallon drums because they do not have the volume flow of the bigger guys. While the larger blenders may indeed buy in 5000 gallon railroad cars, this one specific model was for a specific situation. If you want to do "what-if" analysis, then put this info on a spreadsheet and change the variables. I apologize, but I do not understand the last sentence. [ January 14, 2003, 02:17 PM: Message edited by: MolaKule ]
 

Giles

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quote:
Originally posted by MolaKule: I apologize, but I do not understand the last sentence.
Molakule wrote: 1. 80% PAO - $1.60 2. 20% TMP Ester - $0.70 ---------------------------------------- Cost of base oil: $2.30 3. Additive pkg. $1.27 Total Oil: $3.57/qt. Let me ask the question a different way so you can see where I'm coming from. What is different from an additive package in this example, to an additive package you find in a popular oil such as Castrol GTX. The reason I ask is you can purchase GTX, for almost the price of this additive package. Are there additional Esters than those listed on item 2?
 

MolaKule

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"What is different from an additive package in this example, to an additive package you find in a popular oil such as Castrol GTX. The reason I ask is you can purchase GTX, for almost the price of this additive package. Are there additional Esters than those listed on item 2? " First , additive packages are tailored for the type of base fluid or combination of base fluids to be used. And yes, some additives are in ester form, but I was attempting to define bases fluids composed of only PAO and esters with a separate additive package. Why does the additive package cost more for a synth than say for a GTX-type oil? (a.) Additive packages are tailored for the type of base fluid or combination of base fluids to be used, and, (b.) most full synthetic formulations are designed for extended drains or racing service. The GTX oil is an over-the-counter (OTC) oil NOT expected to give service past 3-5k. Therefore, why put an expensive additive package in this category of oil?!? Why place an expensive additive package in a base oil (GI and GII) that has oxidation and other longevity issues such as volatization? Edit: BTW, this is not to say that GTX is NOT a good OTC dino oil. It simply has its limitations and expectations as well. [ January 14, 2003, 05:10 PM: Message edited by: MolaKule ]
 

Giles

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quote:
Originally posted by MolaKule: Why place an expensive additive package in a base oil (GI and GII) that has oxidation and other longevity issues such as volatization?
Good point, I guess up until now I hadn't though about the additive packages as contributing much to the cost, but I guess I assumed wrong. Thanks [Smile]
 

MolaKule

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Many of you are curious as to pricing structures for synthetics. Here is a cost model making the assumption that you are a blender buying all of your materials from a supplier, and you are also buying in 55 gal drum quantities (or more). Now these are appromomate costs and will very with market price and supplier. Case 1: For a 80/20 full synthetic per quart. 1. 80% PAO - $1.60 2. 20% TMP Ester - $0.70 ---------------------------------------- Cost of base oil: $2.30 3. Additive pkg. $1.27 Total Oil: $3.57/qt. Add to this packaging, advertising, support staff, chemistry research, testing and development, and GOVERMENT REGULATIONS, you need to sell this quart for approx. $5.36/qt. or more. Case 1: For a 50/50 full synthetic per quart. 1. 50% PAO - $1.12 2. 50% PE Ester - $1.95 ---------------------------------------- Cost of base oil: $ 3.17 3. Additive pkg. $1.77 Total Oil: $4.94/qt. You would have to sell this qt. for at least $7.41/qt. or more. My Conclusion: I don't think that Mobil OR the specialty blenders are making a "killing" off this stuff.
 
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’Kule, your 2nd case (the 2nd one labeled “Case 1” [Wink] ), is that your guess as to what Red Line is, about 50% polyol ester? --- Bror Jace
 
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What I get out of this is why specialty oils are more expensive. Why not buy major brands which have the economies of scale? ChevronTexaco, for example, makes and sells all of the ingredients to others. I just buy the ChevronTexaco product that meets my needs at a very attractive price. True racing applications may benifit from specially blended lubes. Many, if not most get free product in exchange for advertising to convince the general public to spend more.
 
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Looking at the link. Hasn't M1 replaced what we normally associate with Esters with AN? A grpV oil but not really the same. I also thought most Amsoils had less than 20% ester like M1 5w40.
 
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Sure makes Esso XD-3 0W30/0W40, for around $3/L, delivered, a heck of a deal, eh? Seriously though Molakule, I think your prices are very much on the high-side. At least double, if not triple what the XOM's and the Amsoil's of the world pay.
 
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quote:
At least double, if not triple what the XOM's and the Amsoil's of the world pay.
XOM has the luxury of making their own basestocks and additives (Infineum).
 
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I've seen 55 gallon drums of certain PAO base oil in Schaeffer's plant. This was in the grease section, and may be a different base oil than they use in other products. They do get much oil in rail tank cars. ExxonMobil is half-owner in Infineum, one of the big additive suppliers. Royal Dutch/Shell is the other half-owner. http://www.infineum.com/company/index.html Here are the prices for Group I, II, II+, and III base oils. Note that the only Group III prices listed are for Korean imports. http://www.imakenews.com/lng/e_article000420935.cfm?x=b57PJ0t,b19p9DCt Ken
 
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One reason I sometimes questioned Amsoil's claim that they use only the highest quality additives is because they still use Mg, which is less expensive then Ca. They have to make a profit it too and if it costs them more to buy additives from XOM/Lubrizol then it does for Mobil to make Mobil 1, cost doesn't then equate to quality in this case.
 
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