Global Marine Lube Growth Flat


Global marine lubricant consumption will stay flat, with 1 percent compound annual growth per year from 2013, reaching about 2.3 million tons by 2023, consultancy Kline & Co. projected.

The 2.1 million tons of demand in 2013 was down 0.7 percent from 2010. The marine lubricant demand has been declining over the last few years, primarily because of the weak global economy, Kunal Mahajan, project manager, energy, for Kline & Co., said during a webinar Sept. 10.

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The Asia-Pacific region accounted for more than 50 percent of total demand in 2013, Kline estimated, and is projected to reach close to 60 percent in 2023. Demand in Europe was more than 20 percent in 2013, but is projected to decline below 20 percent in 2023. North Americas share was around 15 percent in 2013 and is projected to decline to a little above 10 percent in 2023.

Other regions accounted for about the remaining 10 percent in 2013, and they are expected to grow a few percent by 2023.

Asia-Pacific is the biggest consumer of marine lubricants and is also expected to grow the fastest as the economies of the region grow, Mahajan said. Demand growth will be led by China, he said, as it is the largest container market globally.

Kline projects the shares for Europe and North America will decline. Again, because economic growth in these regions is much lower compared to Asia-Pacific, he said. Other regions like South America, Australia, and others show some growth but will not be as substantial as growth in Asia.

Suppliers & Segments

Mahajan said five suppliers together accounted for about 90 percent of the total marine lubricants market in 2013. Castrol led with a 24 percent share, followed by ExxonMobil at 22 percent, Shell and Total Lubmarine with 16 percent each, and Chevron at 10 percent.

Trailing the top five are Lukoil, Gulf Oil Marine, Aegean and various other suppliers.

While the top five continue to dominate the global market, the smaller players are very aggressive in this market and are trying to gain as much market share as possible, he said.

The deep-sea segment accounted for 87 percent of marine lubricants demand, with in-land/coastal use accounting for the remaining 13 percent.

Most of the demand for marine lubricants comes from the deep-sea segment, which is essentially the shipping companies in seaborne trade, Mahajan said. Container shipping is one example. Inland and coastal refers mainly to fishing companies and passenger ships that operate in inland waterways.

Cylinder oils accounted for the majority of marine lubricants in 2013, with more than 1 million tons of demand, followed by trunk piston engine oils at more than 500,000 tons. Far behind were system oil and other types of lubricants used in ships, such as stern tube lubes and gear oils.

Driving Demand

Mahajan said five key factors drive the demand for marine lubricants: an increase in global seaborne trade, the impacts of slow steaming, an increasingly younger and more efficient fleet, regulations and engine design.

With global seaborne trade, the higher the trade, the higher the utilization of seaborne ships, and therefore the higher the lubricant demand, Mahajan said. After the economic crisis, seaborne trade growth has been slow. As the global economy recovers going forward, he said Kline expects seaborne trade will grow at a compound annual growth rate of 4 percent until 2020. Moreover, this growth will also be driven by growing economies in Asia, and their demand for commodities, he added.

Mahajan explained that slow steaming is essentially sailing ships at slower speeds to save fuel. Slow steaming has become normal operating practice across all shipping companies, and because of the slow steaming, fuel consumption has gone down, he said. That has had an adverse effect on marine lubricant demand. At the same time, because ships are operating at slower speeds, engine load has had to be reduced.

Because of slow steaming, demand for higher base number lubricants will increase, but because of regulations like sulfur emission norms expected to come in 2015 in emission control areas, the demand for lower base number lubricants in emission control areas will increase, he continued. In a nutshell, the demand for marine lubricants will increase but will move towards an era of having multiple base number cylinder oils that in some regions will require lubricants with a higher base number, and other regions may require lubricants with a lower base number.

He also noted that marine lubricants generally use API Group I oils but as the supply declines, lubricant suppliers will have to start using Group II oils to make their lubricants.

Mahajan said that before the economic crisis of 2008, the shipping industry had ordered many ships. The share of ships older than 15 years in the world fleet declined by more than 5 percent since 2010, he said, and has resulted in lower lubricant consumption for ships.

Regulations such as sulfur oxide and nitrous oxide emission norms, along with Vessel General Permit rules may constitute the most important factor when it comes to determining the types of lubricants the shipping industry will use, he said.

Klines study is titled, Global Marine Lubricants, 2013: Market Analysis and Opportunities.