Japanese Market Continues to Soften

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Japan’s lubricant market continues to soften, according to data released recently by a government agency and the Petroleum Association of Japan. An industry insider said weak automobile sales are partly to blame.

Japan’s domestic lubricant sales volumes fell 27% to 98,100 kiloliters (88,000 metric tons) in May, compared to a year earlier, while production slumped 16% year-over-year to 145,083 kl, according to data recently released by the Petroleum Association of Japan and the country’s Ministry of Economy, Trade and Industry.

“I think that the main reason is the reduction in production in the automobile industry,” said Mitomi Takeshi, chief engineer of Idemitsu Lube Asia Pacific Pte. “Many Japanese industries, including the lubricants industry, are susceptible to automobile production trends.” Registrations of new passenger cars, trucks and buses fell 45 percent in May, compared to the previous year, according to the Japan Automobile Manufacturers Association.

Japan’s imports and exports of lubricants also dropped by double digit percentages, compared to a year earlier. Imports fell 28% year-over-year to 15,242 kl, and exports fell 31% to 51,535.

“On this occasion [during this pandemic], many companies have started to use the web meeting system and are starting to hold web conferences not only internally but also with external customers. Therefore, I believe that the impact of Covid-19 will gradually change the way of sales activities,” he added.

Last year’s lubricant production and domestic sales fell too. According to data released by the Ministry last month, in 2019, production fell 8% to 2.3 million kl, and domestic sales fell 1% to 1.6 million kl. Exports fell 15% to 839,240 kl, and imports fell 4% to 235,247 kl. Grease production fell 10% to 48,606 tons, and domestic sales fell 10% to 48,606 tons. But grease exports rose 10% to 923 tons, and imports rose 6% to 1,817 tons.

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