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China report shows boost for lubes industry

A 2012-2015 report uses an interesting analysis of recent trends to forecast future growth for China's lubes industry.

Research and Markets, the world's largest market research resource, celebrates its 1,519,265th report with a detailed look at China's rapid development to becoming a leading global lubricant producer and consumer. China saw average annual output rise by 8.4% between 2006 and 2010, despite sluggish global growth of just 1.4%.

Nonetheless, reduced demand for imports from Europe and America have caused domestic production to slow down, resulting in apparent consumption dropping by 3.5% year-on-year in 2011 to 8.493 million tons.

Fears surrounding reduced production are allayed somewhat as China's total fleet exceeded 100 million vehicles in the same year. Conservative forecasts suggest China will become the world's largest auto market by 2040. Such rapid expansion will also bring about greater sales of high quality lubricant products, although future supply lines may be jeopardised by international situations. Nonetheless, China's output and demand of lubricant products should reach 9.747 million tones and 9.941 million tons by 2015.

Of the 3,000 lubricant enterprises operating in the region, there are only around 30 foreign companies. Unsurprisingly, the nation's state-owned giants, China Petrochemical Corporation (Sinopec), who produce the Great Wall lubricant brand, and China National Peteroleum Corporation (CNPC), who produce Kunlun lubricants, occupy 50% of the market. Of the remaining half, 30% is taken by foreign majors ExoonMobil, Shell and BP Castrol, while smaller firms with less technical expertise and no access to high-quality lubricants vie for the remaining 20%.

Although they may not enjoy the same level of growth experienced over the past decade, foreign companies see China's future lubricants market as a 'safe bet' and are stepping up investment accordingly. Shell in particular has been ramping up cooperation with domestics giants CNOOC, Sinopec and CNPC in order to secure a foothold in China.

Tags: automotive industry, China, CNOOC, CNPC, Forecasts, Helix, Lubes news, Lubricants, Shell, Sinopec

Published 25th October, 2012

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