China Lubricants Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

Key Highlights

• The COVID-19 crisis had a significant impact on the Chinese automotive industry, as vehicle production came to an unprecedented slowdown. Lubricants, being a necessary component in the market, also saw a major dip. But the lubricant market has gained pace since 2021, and the market is likely to follow a similar trajectory during the forecast period as well.
• One of the major factors driving the growth of the market is the increasing usage of high-performance synthetic lubricants. This is primarily due to improvements in lubricants.For example, they are less likely to catch fire, they wear out gears less, and they last longer.
• On the other hand, the growing number of people who want electric cars could slow down the lubricant market.
• Over the next few years, the market that was studied is likely to benefit from growing wind energy capacities and a growing shift in the country toward bio-based lubricants.

China Lubricants Market Trends

Process Oils - Fastest Growing Segment

• Process oils are used in the chemical, textile, and personal care industries, as well as in the manufacturing of plastics, polymers, yarns, fabrics, cosmetics, and other products.
• Naphthenic oil is one of the main types of processing oils. It is used to make a lot of different things, such as rubber, inks, plasticizers, and sealants.
• In general, process oils can be broken down into white oil and rubber process oil, both of which can be used in many different fields.
• Rubber process oils are often used to make car tires and tubes, bicycle tires, materials for retreading tires, belting, hoses, bottles, battery containers, extruded products, and technical molded goods.
• White oil, a type of processing oil, is a highly refined mineral oil consisting of saturated aliphatic and alicyclic nonpolar hydrocarbons. Owing to the properties exhibited by white oil, it is used as a blending base in pharmaceutical and personal care products. Low-volatility white oil is also used in the production of plastics and adhesives.
• According to the China Association of Automobile Manufacturers, the sales of automobiles in China saw an increase of 2.1% from 26.2 million in the year 2021 to approximately 26.8 million in the year 2022.
• Though new energy vehicles as a category can be considered to be the ones that can significantly hamper the lubricant market, they can also help to provide some growth for the lubricants due to the demand for process oils in the production of tires and battery containers.
• The CAAM said that, besides cars, sales of new energy vehicles went up by 93.4% between 2021 and 2022.The total sales of new energy vehicles at the end of 2022 were approximately 6.8 million, as compared to the year 2021, which had approximately 3.5 million sales over the complete year.
• According to the 18th China International Tire Expo in 2023, cumulatively 3.77 million tons of rubber tires were exported from China in the first half of 2022, an increase of 7.2% year-on-year, and the export amount also saw an increase of 17.4% year-on-year, which shows that there are signs of recovery in the tire industry and therefore keeps China at the number one position of tire producer and exporter.
• Therefore, with the increased demand for automobiles as well as new energy vehicles, a significant amount of increased demand can also be seen in the tires as well as other components where processed oils are considered to be a necessity. Thus, the consumption of processing oils will increase during the forecast period.

Automotive and Other Transportation Segment to dominate the Market

• Out of the variety of lubricants present in the market, engine oils are the most used lubricants in the automotive sector. Engine oils are widely used to lubricate internal combustion engines and are composed of 75-90% base oils and 10-25% additives. They are mostly used in automotive and other transport segments across the world.
• The reduction of wear and tear, protection against corrosion, and smooth running of the engine are the main benefits of utilizing engine oils. They work by forming a thin coating between the moving parts to improve heat transfer and lessen strain when the parts come into contact.
• Rising production and sales of light-duty vehicles are expected to have a direct effect on engine oil consumption, which is expected to drive the demand for engine oil during the forecast period.
• In most of China's regions, automobile sales in each segment increased in 2022 compared to 2021.
• On the other hand, the production of automobiles in the country also saw an increase of 3.4% in 2022 as compared to 2021. The total production in 2022 was approximately 27 million units, while in 2021 it was about 26 million.
• The country's automobile exports have seen a significant improvement.There was an increase of 54.4% in the exports of automobiles in the year 2022 as compared to the last year, which clearly depicts that the market has started to pick up pace after the COVID era.
• Looking at the gradual improvement in the sector, many companies have also started to invest in the segment. Honda has started testing in central China's Hubei province. The tests will check how well vehicles with Honda fuel cells work in a number of ways, such as how well they adapt to the environment, how much fuel they use, and how long they last in different driving conditions.
• Thus, the aforementioned factors are expected to positively impact the automobile and other transportation industries, which in turn will affect the growth of lubricant demand in the country.

China Lubricants Market Competitor Analysis

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