Marine Lube Market: Challenging But Growing


Marine lubricant marketers and their customers face several significant challenges in coming years, but the market is growing and still offers opportunities to new and existing suppliers, an industry insider said at a recent conference.

“That’s why the segment is attracting new entrants even though it isnt easy to provide what customers want,” Caroline Huot, head of global lubricants for Cockett Marine Oil Group, said last month at the ICIS Asian Industrial Lubricants Conference in Singapore.

The marine lubricant market is a growth opportunity despite many challenges and constraints, Huot said.

Global demand for marine lubes was 2.35 million metric tons in 2017, she estimated, adding that those volumes brought an estimated U.S. $4.5 billion in sales revenue. Vessels owned by companies based in Europe, including Russia, consumed 900,000 of those tons, more than any other region except Asia, whose vessels consumed 1.2 million tons. Vessels originating from Africa, the Middle East and India consumed only 200,000 tons, while those based in the Americas consumed just 90,000 tons.

“Those figures don’t mean that those lubricants are used in those regions, only that the vessels owned by companies based there, regardless of where the lubricants are lifted,” Huot said Monday in an interview. Europe has some large fleet operators, such as Maersk.

Vessels based in Greece have combined deadweight of 309 million tons, compared to second place Japan’s 224 million tons. China ranks third at 165 million, followed by Germany at 112 million. Norway is the only other country in the top 10 at 52 million tons.

Shipping companies are demanding companies, she said, explaining that they expect high levels of customer service and technical expertise to help protect their ships. “These vessels are costly assets, so the value is in services,” Huot said. Eighty-five percent of marine lubricant volumes are purchased on contracts rather than spot sales, so the ability to supply around the world is one key to success.

The market will face several new challenges in the next few years, including regulations such as a reduction in marine fuel sulfur levels, mandates to use environmentally acceptable products, ongoing evolution in equipment design and pressures to reduce costs while providing improvements in operating efficiency.

That is not deterring new suppliers from entering the market, she said, citing Japan-based JXTG,Indian Oil, China energy giant Sinopec, Spain’s Cepsa, Enoc of the United Arab Emirates and Russia’s Gazprom. Huot added, though, that there is an absence of a global strategy or investment in most cases.