Global lubricant demand has seen some recovery in 2010 after registering a significant decline of 8.4% in 2009 over the previous year. Of the 36.3 million tonnes of lubricants that were demanded in 2010 most have been consumed by the USA, making it the largest country market. The question, however, remains just how long the USA will maintain this leading position, as countries which have not been significantly curtailed by the global recession are increasing their appetite for lubricants.
Just a few years ago, consumption by the USA accounted for 25% of global demand. Today, this number has decreased down to 22%. Unlike Russia, which has seen a continued depressed demand since the economic crisis, China and India have both managed to retain positive economic growth and are rapidly increasing their lubricant consumption, ranking in at second and third place respectively in terms of global consumption rates.
Today, India accounts for 5.3% of total global lubricant demand. Demand is driven by several factors, including growth in the car and motorcycle population, as well as the growing number of commercial vehicles including buses and trucks, and growth in infrastructure investments, manufacturing, construction, and manufacturing exports.
On the other hand, in view of the enforcement of stricter emission standards which call for higher quality lubricants, longer drain intervals will somewhat limit demand growth. However, this demand for higher quality lubricants is expected to create opportunities for synthetic lubricant suppliers.
For a more detailed analysis of the Indian lubricants market by sector, check back with our blog next week.