Russian’s vehicle market is enduring a difficult period, with steep sales declines projected for 2020 as a quarantine intended to contain Covid-19 devastates businesses, forces millions out of labor and depresses consumer spending.
Tatneft has finished building a lubricants blending plant at the site of its Taneco refinery in Nizhnekamsk, Russia, and plans to start operations in June, the company told Lube Report.
Russian passenger car motor oil demand reached 267,000 metric tons in 2019, up almost 2 percent compared to the previous year, according to a Moscow-based consultancy.
Lukoil invested U.S. $6.1 million since 2018 to increase production capacity and improve efficiency at its lubricant production sites in Russia. The modernization continues in 2020, part of an investment program to strengthen cooperation with international carmakers, the company said last week.
Lukoil joint venture Intesmos grease production was flat in 2019 compared to the year before, while another of its joint ventures, LLK-Naftan, increased its lube additives production by 6 percent, the company said.
Eighty-four percent of motorists in Russia are men, while just 16 percent are women, and men usually handle engine oil changes, whether by doing it themselves or taking their vehicle to a service provider, according to the local subsidiary of French energy giant Total.
Russian base oil export volumes are off an estimated 1 percent this year after a sharp 12 percent decline in 2018, an industry insider estimates. An official from chemicals trader DYM Resources told a recent conference that volumes could rebound thanks to improving economics and capacity expansions.
The European Commission last week adopted a quota for API Group II base oil imports, determining that volumes above 400,000 metric tons per year will be subject to duties of 3.7 percent.
API Group I rationalization continues to occur in Europe, Russia and the Commonwealth of Independent States - with more expected in the Middle East - while an influx of new Group II capacity is projected to result in a surplus of that grade in Russia and CIS countries, an industry insider said.
Imports are on the rise in Russias grease market, but domestic lubricant makers are trying to displace them by offering products of similarly high quality. However, low-quality greases made by some domestic producers continue to dominate a large portion of the market, an industry insider said.