Fuchs Petrolub AG calculates Chinas lubricants demand last year at 5.58 million metric tons, the companys head of global strategic marketing, Apu Gosalia, said last week during a keynote speech at the annual congress of the Independent Union of the European Lubricants Industry (UEIL). The United States, he said, had demand of 5.48 million tons.

Its a significant event for the industry, Gosalia said. The USA had held the top-ranked position ever since Fuchs actually started to record lube market data, which goes back nearly half a century. Fuchs, which is based in Mannheim, Germany, is the worlds largest independent lubricant marketer.

Not everyone agrees that the U.S. has been replaced.

I dont think China is the biggest [lube consumer] yet, said R. David Whitby, chief executive of Pathmaster Marketing consultants, Woking, U.K. But China is coming up, and America is going down, and at some point in the not-too-distant future, China will overtake the U.S.

Most industry sources agree that the U.S. has been the worlds largest lube market for decades. At times in the second half of the 20th century the former Soviet Union claimed to consume volumes that exceeded U.S. demand, but some analysts believe those data were exaggerated.

For a number of years the United States was by far the biggest market. In 1999 Fuchs estimated U.S. demand at 8.6 million tons and Chinas at 3.2 million tons. In recent years, however, the two markets have been on very different trend lines. The U.S. consumption has been relatively flat and in some years even declining, largely due to shifts toward higher quality, longer-lasting lubes. China, on the other hand, has a growing population and rapidly industrializing economy.

Gosalia offered data to illustrate those trends. In 1999, he said, the United States had one of the highest rates of per capita lube consumption in the world – 31 kilograms per person per year. Since then that rate has fallen to 17.9 kg. In 1999 China had a lube consumption profile typical of a developing nation, including a per capita rate of 2.5 kg/year. By last year its rate had risen to 4.2 kg per person per year.

Still, Gosalia said Fuchs had not projected China to catch up this quickly but that change was especially drastic last year. Maintaining its economic growth throughout the recession, Chinas lubricant demand rose by 6 percent in 2009, much more than any other major market. At the same time, U.S. demand declined by 15 percent.

The two largest lube markets remain far larger than any others. Gosalia places Japan in third place with annual demand of 1.44 million tons, followed by Russia with 1.17 million tons and India with 1.15 million tons. Brazil is next with 1.08 million tons, he said, then Germany with 850,000 tons.

The ascendance of Chinas market is no surprise to the industry. Foreign lubricant marketers, base stock manufacturers and additive suppliers have steadily set up operations and targeted the market in recent years. Gosalia and Whitby agreed that Chinese lube demand will continue growing for the foreseeable future. Still, Whitby downplayed the idea of China replacing the United States as a focal point of the industry.

I dont think its particularly significant for China to become the largest market, he said. There are many other areas where lubricant demand is growing and creating opportunities – from India to Vietnam, Thailand, certainly South Korea and Malaysia and places like Ukraine.

He also predicted that lubricant and additive technology would continue coming mostly from Western companies, with specifications being developed largely for equipment built by Western manufacturers.