Asia-Pacifics demand for fully synthetic lubricants will grow an average of nearly 8 percent per year from 2013 to 2023, consulting firm Kline & Co. forecast last month. It also predicted that the regions demand for semi-synthetics will increase more than 4 percent per year over the same period.
Synthetics and semi-synthetics accounted for 10 percent of Asia-Pacifics 2013 total lubricants demand, not including process oils, the U.S. firm estimated. Synthetics made up 13 percent of global demand of 33.5 million metric tons, again not including process oils. Kline predicts that synthetics will constitute 18 percent of the worlds 38.7 million t/y lube demand by 2023.
Much of that has to do with OEM technical demand, new vehicle sales in Asia-Pacific, and industrial and commercial equipment modernization, George Morvey, industry manager for Klines Energy Practice, said during a web presentation June 11 on the report, Global Synthetic Lubricants 2013: Market Analysis and Opportunities. The widespread availability of API Group III base oil is another key factor, he said, noting that Group III is moving into the automotive space and driving growth in synthetics.
Synthetic lubricants covered in the study included those formulated with API Group III, Group IV and various Group V base stocks. Morvey noted that while semi-synthetics contain a portion – usually 20 percent to 30 percent – of such base stocks, there is no agreed cut-off.
Synthetic products accounted for 26 percent of total passenger car engine oil demand in Asia-Pacific in 2013. We do see in China and India that semi-synthetic demand is high in those countries, Morvey said. Much of that has to do with price sensitivity, and just the mix of the vehicle parc, with a lower penetration of premium and luxury vehicles. Because of that, there isnt that demand for [full] synthetics. However, he added, developing OEM technical demand and supply push is gradually creating a market for synthetics in Asia-Pacific. He said that significant efforts aim to increase consumer awareness of the value of synthetics in emerging markets where such awareness is currently low, for example in China and India.
Australia has the highest synthetic penetration in its consumer lubricants demand – 81 percent in 2013 – followed by South Korea (76 percent), Thailand (36 percent), Japan (30 percent), India (21 percent) and China (16 percent).
Synthetics made up only 3 percent of total heavy duty engine oil demand in Asia-Pacific in 2013. Kline attributed the lower synthetic penetration to an older and poorly maintained fleet, the fact that monograde oils still account for between 40 percent and 80 percent of the segment, a preference for frequent oil drain intervals and harsh operating conditions and infrastructure.
South Korea had the regions highest synthetic penetration in its commercial lubricant demand at 21 percent, followed by Japan (8 percent), Thailand (6 percent), Australia (5 percent), China (1 percent) and India (1 percent).
Synthetics accounted for 9 percent of industrial lubricant demand in Asia-Pacific in 2013. Kline found the synthetic penetration highest in South Korea (19 percent penetration), due to Group III base stock availability there, and Australia (13 percent penetration), due to OEM approvals and recommendations, prevalence of modern equipment and regulations. Synthetics constituted 9 percent of industrial lube demand in Thailand, 8 percent in China and Japan, and 5 percent in India.
Kline found that ExxonMobil is the leading supplier of full synthetics in Asia-Pacific, with a 13 percent share of the segment. It was followed by Petronas (9 percent), BP (8 percent), Shell (7 percent), Total (6 percent), Fuchs (4 percent), Chevron (3 percent) and Valvoline (1 percent).