Continued from page 23
In 2022, Group II represented approximately 41.2% of global demand. This has increased significantly from 2015 (34.3%) and 2019 (38.2%) pre-COVID demand estimates. Group I demand continues to decline as many regions are transitioning their Group I based industrial and low performance engine oil products to the higher Group II and Group III qualities. Group I share in 2022 was estimated at 32.8%, down from 39.8% in 2015 and 34.4% in 2019. Group III demand share was 14.8% in 2022, an increase from 14.2% in 2015 but lower than the 15.6% share in 2019. This is due to the significant impact that the global pandemic had on the passenger car engine oil sector that is still in a recovery mode. Group III demand is forecast to grow consistently into the future as many PCMO products shift towards lower SAE 0W-XX and SAE 5W-XX grades where Group III base stocks are required.
Europe European demand for finished lubricants was 5.9 million MT in 2022, with Western Europe comprising the largest share at 3.8 million MT (63.9%) followed by Central Europe at 1.6 million MT (26.6%) and Eastern Europe at 0.6 million MT (9.5%). Demand has remained steady during the pre-pandemic era but realised a significant drop of 1.6 million MT or 23% due to COVID-19. Recovery is in progress, but this has been hampered by sluggish economies in some key countries like Germany, France, Spain, Italy and the United Kingdom, the conflict between Russia and the Ukraine, and the significant push by the European Union to advance the adoption of electric vehicles and hybrids into the region at the expense of the internal combustion engine (ICE). Demand has increased approximately 7.9% from its 2020 low of 5.5 million MT but is not expected to reach pre-pandemic levels. The result will be the establishment of a new “lower norm” for lubricant demand of approximately 6.0 million MT versus the previous norm of 7.0 million MT.
Europe has a strong industrial base that provides a strong demand for industrial lubricants, including hydraulic oils, industrial gear oils, grease, and metalworking fluids. Figure 5 provides an overview of lubricant demand by three important industry segments, namely consumer (i.e., PCMO), commercial (i.e., HDEO) and industrial oils.
The e-mobility movement will have the greatest impact on the consumer segment as passenger cars
24 LUBE MAGAZINE NO.179 FEBRUARY 2024
transition away from ICE towards EVs where engine oils are not required. That said, there will continue to be a demand for synthetic and semi-synthetic engine oils within this segment as companies continue to shift towards lower SAE grade engine oils for increased fuel economy performance. This will support a continuing demand for higher VI Group III and Group III+ base oils, the latter as characterised by a VI that is ≥130. Many engine oil manufacturers require performance that exceeds general market requirements as defined by ACEA; in these instances, the higher performance is addressed using higher VI base oils.
Figure 5: European Lubricant Demand by Category
Base oil demand for the European region is continuing to shift away from solvent refined Group I and towards hydroprocessed Group II and Group III. The introduction of Group II by ExxonMobil at its Rotterdam facility in the Netherlands in 2018 represented a key event in support of this transition, although many companies like Chevron and Saudi Aramco have supplied Group II into the region as part of their Group II global slate offering. This is shown in Figure 6.
Figure 6: Paraffinic Base Oil Demand - Europe - 2015 to 2022
It is interesting to note that there is a higher demand for Group III base oils in Europe than Group II. This
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 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60
