Chevron’s largest market share is in North America and all the top four benefit from major Original Equipment Manufacturer (OEM) ties as the recommended fluid especially when machinery is still in their warranty periods.

Sinopec and PetroChina are the fifth and sixth largest suppliers respectively as major domestics which have been gaining market share over recent years.

Domestic suppliers tend to lag behind the majors in terms of OEM ties but have made technology gains over recent years. Traditionally built on price, domestics product quality and technology is catching up with the market leaders although they are not quite there yet.

These types of suppliers also tend to benefit culturally from an expectation that local industry will use a local supplier. For example in China there is an expectation that domestic suppliers will be used, especially in out-of-warranty applications, and this is helping to shore up the demand of domestic suppliers.

Early overall projections of demand predicted that 2020 would see a 13% decline in volume of around 800kt. It is not until 2024 that there is expected to be some growth return to the market but even then it will still not exceed 2019 levels over the next five years. However, by 2024 we are expecting to see around a 3% growth which is expected to start in this year (2021) and grow out to 2024.

South America, Africa and Middle East are expected to surpass their 2019 levels more quickly than this, but other markets of North America, Europe and Asia Pacific are not expected to surpass these 2019 levels by 2024.

Europe still has a strong manufacturing sector which will help it to come out of recession post COVID-19 and spur demand for GIO and Greases. Whilst North America has shed a lot of manufacturing over recent years, it still retains a large power generation sector which will help their economy to recover.

Over the next few years, the traditional non-synthetic market segment will remain stable whilst more growth will come from synthetic products.

We have seen developing regions adopt fluid

management strategies including predictive maintenance alongside fluid analysis which will also help drive growth in these regions and especially demand for synthetic products.

However extended drain intervals are slowing demand for fluids but the move to premium fluids is driving value in the market.

2021 will see growth return perhaps in the second half of the year depending on whether there will be a second or third wave of COVID-19.

Asia Pacific is expected to remain the largest consumer of GIO and Greases over the short-term, even though the staggered shutdown has really hurt the region.

You may recall that Asia Pacific shut down first due to COVID-19, and stopped making parts to feed other manufacturing sites around the world. So North America, for example, couldn’t assemble automobiles as it did not have all the parts needed from China.

Once China came back online, the customer base of the manufacturing sites were shut down and there was no one to make the parts for. By the time manufacturing opened there was a question about slowing or softening customer demand.

In terms of the supply chain there has been a recent move in manufacturing away from larger plants servicing the needs of a region to the ‘right size’ manufacturing which serves the needs of a smaller region or even a single country. So the impact of COVID-19 has been to shorten supply chains given the uncertainty in transnational markets.

In off-road or off-highway applications there is expected to be a decline in demand for GIO oils and Greases of around seventeen percent. This could be exaggerated by a modal shift away from rail towards truck as diesel prices come down. In rail, we are also seeing in India a retrofit of electric engines alongside diesel engines to reduce emissions.

Marine has had the impact of IMO 2020 overshadowed by the impact of COVID-19. Whereas mining tends to be significantly impacted during periods of economic shutdown or recession but also tends to grow very quickly once recovery

Continued on page 34 LUBE MAGAZINE NO.162 APRIL 2021 33

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53