With the economic slowdown, many industries, for example the iron and steel industry remain sluggish and this has dragged down lubricant demand in the industrial sector. In addition, China’s car ownership has been expanding but the market is reaching saturation. Therefore, car sales growth has slowed down. In line with slower growth in the vehicle sector and decreasing demand from the industrial sector, China’s lubricant demand has weakened in 2015.
As a result of the low buying interest and squeezed production margins in the first half of 2015, PetroChina has been keeping extremely low operating rates at its Group I base oils units. Sinopec slightly increased the operating rates at its Group I and II base oils units. Base oils output from independent refiners also increased slightly. China National Offshore Oil Corporation (CNOOC) Huizhou reduced its output of non-standard base oils. Therefore, China’s base oils output is expected to decline in 2015.
In the import market, the third rise in excise tax and sluggish demand from the lubricant sector have resulted in a fall in base oil import margins, which will drag down import volumes in 2015.
What does this mean for international base oil suppliers in 2016?
The China Base Oils Lube Markets Annual Report analyses the base oils and lubricants market and combines local insight with global perspective. It covers market supply and demand, provides analysis to support international players’ strategic planning work, and sheds light on key growth sub-sectors where international suppliers have a competitive edge.
The ICIS China Base Oils Annual Study covers:
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An in-depth review of China’s base oils markets in 2015 – with a detailed supply/demand outlook up to 2020, the newly updated annual study addresses all of the following questions: