08 October 2010 08:51 [Source: ICIS news]
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SINGAPORE (ICIS)--Strong growth is back in the finished lubricants business across Asia on the back of the region’s robust production of automotives and other industrial goods, according to Tim Ford, Shell's vice president for lubricants for ?xml:namespace>
“We see very strong growth in
Shell has a large stake in the Asian lubricant business being one of the largest international oil companies (IOCs) in the region.
Ford said car production had shown a strong rebound in countries like China, India and Thailand, as well as industrial production like that of steel and white goods (consumer goods) was also growing, resulting in strong demand for industrial lubricants.
According to industry statistics
Shell’s largest presence in the Asian lubricant market is in China with six blending plants located in various cities including Tianjin, Zhuhai and a plant in HongKong.
The company produces some 600,000 to 700,000 tonnes/year of finished lubes at these facilities and accounts for around 11% share of the lube market according to studies by industry consultants like Kline, Ford said.
Shell has a capacity to produce around 1.6 million tonnes of finished lubricants across Asia,
Ford said Shells’ “competitive edge” was based on possessing globally established technology and because of its linkages to OEMs (original equipment manufacturers), an advantage that many national oil companies (NOCs) did not enjoy.
However, he said the national oil companies were becoming important in the domestic markets across
The state-owned PetroChina and Sinopec in
Ford said a large number of independent base oils producers in
“The linkage between a strong base oils position and a strong finished lube position is quite weak now,” he said.
Ford said big blending companies were looking for security of supply amid pricing volatility and supply of base oils and hence integrated plants did not enjoy any particular advantage over those which were not integrated.
Referring to the increasing trend towards the use of group II and III base oils in Asia, Ford said buyers across the region now sought “global standard” products.
“Demand is growing for lower viscosity and fuel efficient oils,” he explained.
Group II base oils can easily be reformulated to replace group I and this was happening in a "big way" in the global markets, he said.
With huge group III base oils capacities coming up in the next few years, we expect a similar increase in group III based formulations
Shell’s gas-to-liquids (GTL) facility in Qatar, named Pearl, which has a capacity to produce more than 1 million tonnes of group III base oils is expected to start up in 2011.
Similarly, other group III capacities announced include Neste’s 500,000 tonne/year facility in
“We don’t see a crisis with increased group III supply with the start of
With parts of Europe de-industrialising,
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