Little Falls, N.J. — Shell has reclaimed the number one position in the world lubricants market in 2006, according to data from a recently completed study by analysts at Kline & Company, a worldwide management consulting and market research firm.
Volumetric data from Competitive Intelligence for the Global Lubricants Industry, 2006-2016, shows Shell edging out its largest competitor, albeit by a slim margin, just one year after ExxonMobil had achieved the top position.
The study indicates that organic growth in Shell’s business in China, Russia, and parts of Asia and Europe, coupled with the company’s acquisition of a 75% share in the Chinese oil company Beijing Tongyi, were the deciding factors. BP, Chevron, and Total round out the top five lubricant marketers.
Kline’s report pegs the global market for finished lubricants at 38.5 million tons, up by 1.5% from 2005 to 2006. However, much of this increase is to the result of unfilled orders placed in 2005 that were not delivered due to the effects of natural disasters such as hurricanes Katrina and Rita and the tsunami that struck southern Asia in December 2005. When adjusted for this, actual growth is less than 1.0%, the same annual growth rate predicted by Kline’s study through 2016.
“It’s a mature, almost stagnant market when you look at it globally, and the only way you can grow is by acquiring market share from someone else,” says Geeta Agashe, director of Kline’s Petroleum and Energy practice. “Demand is growing in certain parts of the world, specifically in the Asia-Pacific region and South America, but Western Europe is declining and North America is stagnant.”
Together, China and India account for nearly 17% of global lubricant consumption, according to Kline’s report. Markets in China, the second largest consumer of lubricants, and India, the fifth largest, are growing at rates of at least 6% annually, far exceeding the world average. This is due to the growth of industrial production in those countries and the increase in automotive consumption of lubricants by both passenger cars and commercial fleets.
“Moving forward, organic growth is not expected across the industry — only in select niches,” says Agashe. “Astute marketers should be watching consumer and industrial trends closely, because the oils that are going to do well in the future are the ones that meet a specific customer need.”
Examples of these niche oils are ExxonMobil’s Mobil 1, which performs extremely well in the synthetics category, and Quaker Chemical’s specialty fire-resistant hydraulic lubricants.
Also to be watched is the growing importance of some of the nationalized and independent oil companies. Indian Oil and China’s Sinopec are working to expand outside their home markets, as are Petrobras of Brazil, Pertamina, the national oil company of Indonesia, LUKOIL of Russia, and Petronas, the Malaysian national oil company.
Competitive Intelligence for the Global Lubricants Industry, 2006-2016 provides a comprehensive assessment of select national markets for commercial automotive, consumer automotive, and industrial oils and fluids.
The study examines six geographic regions through aggregate research gathered at the country level and includes a complete year in review for the industry, supplier and country profiles, and 10-year market forecasts.
For more information on this research, go to www.klinegroup.com/reports/y533.asp.