China’s lubricant industry is entering a phase of market instability, as supply chains are disrupted by conflicts in the Middle East and market expectations become increasingly demanding, according to analysts.
China vies with the United States as the world’s largest lubricant market, valued at approximately U.S.$28 billion. In volume terms, demand remains relatively flat at around 7.7 billion liters, reflecting shifts such as vehicle electrification. However, this is partially offset by growth in industrial activity and higher-value synthetic lubricant products.
Reports of supply restrictions, frozen orders, sharp price increases and product shortages are becoming more frequent, according to the China Lubricating Oil Information Network, also known as Sinolub.
Industry sentiment shared on WeChat suggests that manufacturers’ profits are increasingly under strain, in some cases barely covering annual American Petroleum Institute certification fees. Rising raw material costs continue to add pressure, while distributors push for lower prices to protect margins and end users demand both affordability and high performance.
Despite these challenges, overall demand in China’s domestic lubricant market remains firm. Yao Qi, chairman of Zhong Hua Lubricant Co., said in an interview with Sinolub that consumption levels continue to hold steady.
However, Yao emphasized that the difficulties facing the lubricant sector are not isolated. Instead, they reflect broader economic pressures affecting multiple industries across China.
As a result, companies are turning to export markets in Southeast Asia, including Indonesia, Vietnam and Thailand. These markets offer strong demand driven by large fleets of motorcycles and gasoline-powered vehicles, alongside expanding industrial manufacturing sectors.
China’s finished lubricant exports rose by 10% to 260,000 metric tons in 2024 and increased by a further 18.43% year-on-year in 2025, highlighting a growing reliance on overseas demand to offset domestic margin pressures.