【Lubricant Additives】Demand Keeps Rising Year after Year; Four Major Additive Companies Accelerate Their Presence in China

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According to some market research firms, the global demand for lubricant additives was 4.28 million tons in 2015, and it is expected to reach 5.36 million tons by 2024, with a compound annual growth rate of 2.5% during the period from 2016 to 2024. Lubricant additives are organic or inorganic compounds; some are liquid and can dissolve in the lubricant, while others are solid and remain suspended within it. The amount of additives in lubricants is not high; it varies depending on the type of oil, ranging from 0.1% to 30% (by volume). Some lubricants contain a large amount of additives, such as engine oil, while others contain fewer additives, such as turbine oil. Before the 1980s, the additive raw materials for blended lubricants in our country were basically single agents. That is, based on the quality requirements of the oil to be produced, a base oil with certain properties is selected, along with some additive compounds that can improve specific characteristics of that oil. Over the past decade or so, with a significant increase in imported cars and those manufactured using introduced technologies, the quality requirements for internal combustion engine oils have also become higher. Some manufacturers produce composite additives based on bench tests. The functions of lubricant additives can be divided into three aspects: 1. Further enhancing certain properties inherent in the base oil itself, such as antioxidants, rust inhibitors, antifoam agents, and demulsifiers. 2. Compensate for the shortcomings in the properties of the base oil, such as pour point depressants and viscosity index improvers. 3. Endowing the base oil with new properties, namely those that it does not possess inherently; these properties are mainly achieved through additives such as extreme pressure agents (EP), dispersants, and metal deactivators. The demand for lubricants in China accounts for 46% of the total demand in the Asia-Pacific region, while the demand for lubricants in that region makes up 43% of the global demand. Shell once predicted that China would overtake the United States to become the world’s largest consumer of lubricants. Automotive lubricants represent the largest application area for lubricants; in 2015, they accounted for over 59.5% of the total amount of lubricants used. The growth in automobile production and sales in China, Thailand, India, and Indonesia was the main driving factor behind this trend. The Asia-Pacific region is the leading market for lubricant additives, accounting for over 30% of demand in 2015, with an average annual growth rate of over 3% expected in the future. The strong growth momentum of China’s automobile industry over the next 10 years will make China the world’s largest market for lubricant additives. Most of the imported additives in our country are monopolized by multinational companies, with Lubrizol, Unipar, Chevron, and Afferton being the main ones. Domestic additives have developed through independent research and development as well as the introduction of foreign production technologies, and have reached a certain level of production scale; however, there is still a gap in terms of quality. At the same time, the technology for formulating mid-to-high-end lubricants and the market for additives are largely under the control of additive companies. Foreign additive companies have seized China’s high-end additive market by leveraging their advanced technologies and superior product qualities, and they are set to increase their share in this market in the future as well.