The Chinese economy has slowed down in part due to the governments efforts to reorient the economy away from exports and investment-driven growth to consumption-driven growth. This slowdown, as well as the reorientation in the economy, has significant implications for the Chinese lubricants market. Efforts to improve Chinas air quality will accelerate the use of high performance lubricants.
The Chinese economic growth rate is projected to slow down considerably compared to its historical performance. Real GDP growth has slowed to 6.9% in 2015 and projected to possibly be as low as 4% by 2020, from a high of over 10% in 2010, according to a report from consultancy Kline & Co.
During a webinar covering the report on Wednesday January 8, 2017, David Tsui, Project Manager in Kline's Energy/Petroleum Practice, discussed these views and other insights from the recently published report Opportunities in Lubricants: China Market Analysis. The 864-page report covers the industrial, commercial, and consumer segments of lubricants in China, with forecasts to 2020.This study provides a comprehensive analysis of the Chinese lubricants market, focusing on key trends, developments, challenges, business opportunities, and major suppliers.
According to Tsui, the finished lubricants market in China is projected to decline, caused by the global economic downturn and new government policies that are restructuring industries.
The lubricant market in China is estimated at 7.0 million tons, valued USD 26 billion in 2015. Of that, the greatest lube oil consumption, by volume, is in the industrial segment, followed by commercial and then consumer segments, according to Tsui. By dollar amount, the consumer segment is the largest, followed by the commercial segment, with the industrial segment being the least. Engine oil represents greater than 70 percent of commercial and consumer lubricants (3.9 million tons total) while process oil is the largest segment in industrial (3.1 million tons total).
Local majors, at 39 percent, which includes oil companies such as PetroChina, Sinopec and Tongyi, represents the greatest lubricant segment, followed by local minors, which includes Yuchai, Lopal, Laike, Shandong Yaungen and many others, at 32 percent. The major multi-national companies and other foreign players, which includes Shell, ExxonMobil, BP, Total Lubricants China, Fuchs, Chevron, ELF, Idemitsu, represents the least at 29 percent. Driven by OEMs, the MNCs have the highest lubricant market share in the consumer segment while local majors have the largest share in the industrial segment.
This report Opportunities in Lubricants: China Market Analysis is available from Kline with a special 15 percent discount being offered by Kline through February 28, 2017 for webinar attendees.
