Valvoline Inc. has resumed construction of a lubricants plant in Zhangjiang, China, after suspending the project in February amidst the country’s coronavirus outbreak.
Base oil refiners in Asia are slashing production and looking for alternative markets amid plummeting lubricant and grease demand in China, industry insiders say, as the coronavirus outbreak continues to rattle markets.
Lube consumption in China dipped 1.3 percent to an estimated 7.4 million metric tons in 2019, while the value of the market remained the same at nearly U.S. $29 billion, according to a recent report by consultancy Kline & Co.
Auto sales in China fell again in 2019, decreasing 8.2 percent to 25.8 million units, according to data released by the China Association of Automobile Manufacturers.
Infineum has signed a letter of intent to add a second phase to its lubricant additive plant in Zhangjiagang, Jiangsu province, China, expanding a facility that first began production in 2016.
Hainan Handi Sunshine Petrochemical Co. is in talks to prepare an initial public stock offering on the Hong Kong Stock Exchange, aiming to raise funds to develop a finished lubricant business, according to a senior manager at the company.
Although China was the worlds second-largest lubricant market in 2018, it is expected to shrink by a compound annual rate of 0.3 percent out to 2023, according to a Kline & Co. study.
Declining automotive sales in China and India are expected to impact demand for base oils, industry experts said at a conference in Singapore last month.
The United States-China trade war presents an opportunity for Chinese white oil suppliers to grab market share in their domestic market, gaining ground on importers from the U.S. and elsewhere, according to attendees at an industry conference last week. They added that Chinese companies can leverage long-term advantage by improving the quality of their products.
A new Chinese national standard for diesel engine oil is expected to go into effect next year, leaving Chinese lubricant blenders relying on additive makers to comply, an official from one additive supplier said at a conference in Singapore this month.