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LOCAL REPORT


Latin America and the Caribbean (LATAM)


Sharbel Luzuriaga, Project Manager at Kline Market Research Energy


With a population of around 650 million people, LATAM is a vibrant region that contributes almost 10% of the global finished lubricant demand.


The region’s GDP grew at an estimated rate of just below 0.5% in 2019, a modest recovery after turbulent years of economic downturn. Latest forecasts showing a growth of 1.5% for 2020 were significantly revised downward given the current scenario of the COVID-19 pandemic and an economic contraction of about 2% in LATAM’s GDP is expected for 2020.


The finished lubricant market in LATAM reached a pre-crisis level in 2019


Kline estimates the Latin American and Caribbean finished lubricants market at around 3.8 million metric tonnes in 2019, with the largest countries, including Brazil, Mexico, Argentina, and Colombia, accounting for about 70% of the finished lubricant demand in the region.


Within industrial engine oils, marine oils are the largest subcategory in LATAM. In some countries such as Panama and Ecuador, it is reported that some portion of the engine oils classified as marine are used in power generation.


LATAM is one of the most urbanized regions in the world, with more than half of the population living in major urban agglomerations. LATAM commercial lubricant demand is also composed of public transportation fleets, such as city buses, as it is the preferred method of transportation.


Conventional multigrade HDMO, 15Ws, continues to be the dominant grade for heavy-duty engine oils in LATAM, accounting for more than 50% of the total heavy-duty motor oil demand in the region, with sizeable consumption of monogrades.


The LATAM consumer lubricant segment is characterised by high demand for high-viscosity motor


42 LUBE MAGAZINE NO.157 JUNE 2020


multigrades, such as 15Ws, but also 20Ws and 10Ws; together, these grades account for about 60% of the passenger car motor oil (PCMO) demand in the region. Demand for monogrades remains significant (about 20%) in a region where imports of aged vehicles from the United States are still very popular, despite the various initiatives to regulate this activity.


Lower viscosity grade PCMOs, SAE 0W-XX and SAE 5W-XX, currently account for a 15% share of total PCMO demand, expected to expand to over 20% in 2024. The large motorcycle population in Brazil and Colombia are the largest markets for 2T/4T motorcycle oils.


Shell and ExxonMobil are the 2 top suppliers of finished lubricants in LATAM, although their position is being challenged by a highly dynamic local supplier landscape that has witnessed a number of mergers and acquisitions.


The outlook for the LATAM finished lubricant market remains bright despite the various challenges.


Finished lubricant demand in LATAM is forecast to reach 4.1 million metric tonnes in 2024 and 4.5 million metric tonnes in 2029, with Brazil, Mexico, Colombia, Chile, and Peru leading the way.


Demand for finished lubricants in LATAM is forecast to grow at a CAGR of nearly 2.0% between 2019 to 2029 although emerging regional differences show that recovery and growth in the aftermath of the COVID-19 pandemic will not be uniform.


The extended local report is available to read on the Lube Media website, www.lube-media.com/local-reports


LINK www.klinegroup.com


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