Global Lubricant Basestocks: Market Analysis and Opportunities

Trends and Insights gathered from the CIS Base Oils and Lubricants Conference

About the conference and impressions

The CIS Base Oils and Lubricants conference has gained significant traction since its start five years ago, becoming a highly recognized event within the CIS (Community of Independent States) region. The conference’s agenda is exclusively dedicated to the base oils and lubricants industries in Russia, Belarus, Ukraine, Kazakhstan, and other CIS countries; however, every year, the number of international guests increases, mainly from Western Europe, but also from the United States, India, China, etc.

The CIS Base Oils and Lubricants conference provides a comprehensive discussion platform to address pressing issues in the Russian and CIS lubricants industries, from an ample range of perspectives along the value chain, including additive suppliers, base oils and lubricants marketers, as well as OEMs.

Over the past two years, there has been revived interest on re-refining strategies, as well as in requirements for OEMs and import substitution. The latter has become an aspect of utmost interest given the policies imposed by the Russian government as a retaliation of sanctions imposed by the European Union. Russian companies seek opportunities for growth in the Russian domestic market, targeting import substitution and competing with international brands in the mid-upper product tier. More formerly, imported lubricant products are currently being blended in Russia by affiliates in major international suppliers.

Overall, from the various presentations, I gained the impression that there is a positive mood across the region. The situation in the CIS markets can be challenging, but there is a prevailing sentiment that the lubricants market is stabilizing, undergoing a quality shift and switching away from obsolete GOST specifications towards superior performance lubricants holding internationally recognized OEMs approvals.

Key takeaways from my presentation at the CIS conference in May 2017:

  • After three years of contraction, the Russian economy is projected to recuperate in 2017, although vulnerabilities remain.
  • Russian demand for industrial oils was estimated at 750 kilotonnes in 2015 and forecast to post modest growth not higher than 1.0% over the next five years.
  • The Russian energy, extractive, and heavy manufacturing industries continue to drive demand for industrial lubricants.
  • The Russian market for industrial lubricants is highly price-competitive, where alliances and customer intimacy plays a crucial role.
  • The embargo imposed on Western food imports has transformed the food industry, boosting demand for industrial lubricants, such as compressor and refrigeration fluids and food-grade greases.

For more insights on this region, ask us about the latest country profiles from our Global Lubricants series and Lubesnet Database.

Written by: Sharbel Luzuriaga, Project Manager, Energy Practice.

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