1. Market Situation of Lubricating Oil Additives

A. Global Lubricant Additive Market

Since the 1930s, the global lubricating oil additive industry has gradually developed to a relatively mature stage, and the market scale is large and basically tends to grow steadily. The global demand for lubricant additives increased from 4 million tons in 2012 to 4.42 million tons in 2018, and the market size increased from 13.3 billion US dollars to 14.3 billion US dollars. Taking into account the rapid growth of emerging economies such as India and Brazil, and the impact of the Federal Reserve's withdrawal on the global economy, the annual demand for real lubricant additives has entered a new cycle of growth. It is expected that by 2023, the global demand for lubricant additives will increase to 5.43 million tons, with a market size of about 18.5 billion US dollars.

Relevant reports: China Lubricating Oil Additives Market Special Survey and Development Trend Analysis Report 2019-2025 issued by Intellectual Research Consulting

Globally, according to the functional distribution of lubricating oil additives, dispersants, viscosity index improvers and detergents are the three most commonly used functional agents, accounting for 65-70% of the total demand for lubricating oil additives. Among the other additives, antiwear agent accounts for 6-7%, antioxidant and friction modifier account for 4-5%, emulsifier accounts for 3-4%, and other additives account for 11-12% of the total demand.

Distribution of Global Lubricant Addition Demand by Function

Globally, according to the main application areas of lubricant additives, about 70% of lubricant additives are used in motor vehicles (mainly passenger vehicle engine lubricants, heavy-duty engine lubricants and other vehicle lubricants); secondly, metal processing fluids and industrial engine lubricants, which use the same amount of additives. A small portion is used for general industrial lubricants and greases. PCMO (passenger car engine lubricant) and HDMO (heavy-duty engine lubricant) account for about 46% of global lubricant consumption, while the lubricant additives for PCMO and HDMO account for 60% of the global demand for lubricant additives, which is due to the need to add more additives to these two types of oils. From the growth rate of demand for various lubricating oil additives, the top three annual growth rates in 2016-2018 are antioxidant 5.2%, dispersant 3.1%, viscosity index improver 2.5%. The rapid growth of these three additives is due to their application in passenger car engine lubricants and heavy-duty engine lubricants, which account for a large proportion of demand and grow rapidly.

Distribution Chart of Additives for Different Lubricants

B. China Lubricating Oil Additive Market

China's additive industry started relatively late. Since the establishment of the additive industry in the 1950s, through independent research and development and introduction of foreign production technology, after decades of accumulation and development, it has formed a certain scale of production. China's huge consumption potential of lubricating oil has stimulated the demand for lubricating oil additives. As one of the largest lubricating oil consumers in the world, China's demand for lubricating oil additives increased from 750,000 tons in 2013 to 919,000 tons in 2018, with an average annual growth rate of 4.2%. With the continuous growth of China's motor vehicle market and the acceleration of industrialization process, it is expected that the domestic demand for lubricant additives will continue to maintain a high growth rate. By 2023, China's demand for lubricant additives will increase to 1.12 million tons.

Demand of Lubricating Oil Additives in China

The demand structure of lubricating oil additives in China is similar to that in the world. The top three lubricating oil additives in demand are dispersants, viscosity index improvers and detergents, which account for more than 65% of the total demand.

The proportion of additives classified by function in China

2. Market Capacity of Lubricating Oil and Its Impact on Demand for Lubricating Oil Additives

A. Global Lubricant Market

In recent years, the global total demand for lubricants fluctuated slightly, but remained basically stable. After the financial crisis, the rapid development of emerging economies represented by China has led to the growth of global demand for lubricants. Global demand for lubricants was 36 million tons in 2008. Affected by the global financial crisis, the global demand for lubricants fell to 32.2 million tons in 2009 and rapidly recovered to 46.6 million tons in 2018. It is anticipated that the global lubricant market will continue to grow. Global demand for lubricants will reach 49.1 million tons by 2020 and sales will reach 178.87 billion US dollars. Of the global demand for lubricants, vehicle lubricants account for about 54% and industrial lubricants account for about 46%.

The development of lubricating oil market and the change of demand always show different characteristics with the maturity of market and different stages of economic development in different regions. The consumption of lubricating oil in developed countries is much higher than that in economically backward countries. Historically, North America and Europe used to be the main producers and consumers of lubricants, but in recent years, the production capacity and development focus of the global lubricating oil industry are shifting to Asia-Pacific developing countries represented by China and India. The market of Asia-Pacific developing countries represented by China and India has become the global demand for lubricants. The fastest growing regions will account for about 44% of the global market share.

Regional Distribution of Global Lubricant Consumption

3. The influence of the development of downstream extension industry on the demand of lubricant additives

A. The number of domestic motor vehicles is the second largest in the world, and the automobile industry is developing rapidly.

By the end of 2018, the total number of motor vehicles in China had reached 327 million, of which 240 million were automobiles, an increase of 22.85 million compared with 2017, an increase of 10.51%. China's motor vehicle ownership ranks second in the world all the year round.

Change of China's Motor Vehicle Ownership from 2013 to 2018

B. China's construction machinery market is huge

Construction machinery industry is another important consumer market of lubricants and lubricant additives. After 50 years of rapid development, the technical strength of China's construction machinery industry continues to improve, and the industry has entered a stable development stage. Over the past 10 years, the construction machinery industry has experienced a complete development cycle. In the process of this round of adjustment, the industry's capacity expansion has slowed down significantly. The main equipment possession of construction machinery has gradually entered a Zero-growth stage, the stock equipment has gradually entered the replacement period, and the renewal demand has gradually taken the lead. China's construction machinery and equipment ownership increased from 4.47 million units in 2010 to 7.47 million units in 2017, with an annual compound growth rate of 7.61%.

Main Equipment Holding Quantity of Construction Machinery in China from 2010 to 2017