Russian Lubes Slog Toward Recovery

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Russian Lubes Slog Toward Recovery
A worker operates a cold welding machine to weld the seam of a metal tank at a factory in Donskoy, Russia. © Dmitry Veselov

Russian finished lubricant production has been sluggish and stood at about 1 million tons in the first eight months of 2021 as the economy recovers very slowly from the recession and as industrial output stagnates, according to a market report.

Automotive engine oils, transmission fluids and hydraulic oils are the only product categories that have seen significant growth during this period, while all others stagnated or declined, said B2X, the Moscow-based consultancy. It quoted data from state and private agencies.

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Russian motor oil production stood at 403,000 metric tons in the first eight months of the year, up from 325,000 tons in the same period last year, a 24% increase. The firm added that the pace of production in the category accelerated toward the end of the period.

Transmission fluid production stood at 54,000 tons in the eight-month period, up 36% from the same time in 2020. In the eight-month period, hydraulic oil production stood at 132,000 tons, up 16% from the same period last year. Around 24,000 tons of compressor oils were produced in Russia in the eight months of 2021, only 6% more compared to the same period in 2020.

Over the eight months, the country produced less turbine oils – 19,000 tons, compared with 21,000 tons in the same time in 2020, a 10% decrease. Production of industrial oils fell 22% to 407,000 tons.

B2X found that sales of new passenger and light commercial vehicles rose 15% during the first three quarters to at 1.26 million units. But car sales in Russia were still 1% lower than the comparable period in 2019.

 “In the final quarter of 2021 and beyond we expect this number to continue to decline as authorities introduced such health measures as QR code scanning for each person visiting public spaces,” the consultancy said.

The QR or quick response codes have been introduced by Russia, China and some European countries as a proof of vaccination, a measure to fight the spread of COVID-19.

Used passenger car sales in Russia increased to 2.26 million units in the first five months of 2021, up 28% from the comparable period last year, B2X said, quoting data by Autostat. The most popular used car brands in the country are Lada (533,000 units sold in the first five months of this year), Toyota (250,000 units sold), Nissan and Hyundai (125,000 units sold for each) and Kia (123,000 units sold).

Russian turnover of goods has also seen progress in the first eight months of 2021 with a 6% increase. But it remains below 2019 levels.

Russian passenger transportation, including rail, bus, river, sea and air, has yet to recover from the pandemic. In the first eight months of this year, it was 26% lower than in the comparable period in 2019 (albeit 37% higher than in 2020). Train and bus passenger transportation, a primary mode of movement for average Russians, is down 21% and 22%, respectively, from 2019.

The country’s index of industrial production in August stood at 0.5%, or at the same level as in August 2019, B2X found. Mining, oil and gas, petrochemicals and metallurgy production all declined in August 2021, compared to August 2019. The best results have seen in the chemical and machine building sectors, as well as woodworking, food production and energy utilities.