Shell sees Asia as main driver for lubes growth

26 August 2008 12:11  [Source: ICIS news]

SINGAPORE (ICIS news)--The lubes business arm of Royal Dutch Shell sees the Asia-Pacific as the main growth driver for the both current and future global lubricants market as demand in the mature US and European markets look set to slow, said executive vice president David Pirret on Tuesday.

 

The global oil and gas major forecast lube demand in China to grow by 7.3% per year through to 2012, he added.

 

Shell expected to meet further increased demand through its sixth lubricant blending plant in Zhuhai, Guangdong province, that was on track for commercial operations in the second quarter of 2009, he said.

 

“There is currently a huge industrial application for lubes in China at the moment and as the industrialisation carries on, every power station, car company continues to consume lubes,” added Pirret.

 

Shell also estimated lubricant demand in India to grow 5% per annum through to 2012, with the automotive industry being the primary driver of growth.

 

“India’s car ownership per head is just one per 100 inhabitants, compared to three per 100 for China and 26 per 100 for Malaysia,” said Pirret.

 

Despite the expectations for a significant slowdown in the US and European lubricant markets, Pirret sees good potential in synthetics lubes demand and forecasts for it to grow approximately 5% per year.

 

However, the company’s earnings were taking a hit from surging energy and crude prices, he said.  

 

“Quite clearly many people see lubes as an optional purchase. They can run their cars a bit longer in many cases and that is really what’s behind the softening demand in the US,” he said.

 

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By: Bohan Loh
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