Upgrading Worldwide Lubricants Markets

Upgrading Worldwide Lubricants Markets

Sep 24, 2018
Posted by Craig Paterson, Vice President, Product Management

Topics: Passenger Cars

There’s been some recent news out of the Brazilian lubricants market that’s worth paying attention to. According to a recent Lubes ‘N’ Greases report, following the 8th Meet the Market South America International Conference in June, the country’s lubricants industry appears to be on the cusp of a rebound after several years of significant decline.

Per Lubes ‘N’ Greases:

“Sales from January through April increased 5.9 percent year over year, and demand is forecast to rise an average of 2 percent annually for the next four years.

That’s big news because Brazil is by far the largest lubricant market in South America, thanks to the size of its automobile fleet and its industrial base… The Brazilian market was hammered the past four years as the country struggled with political and economic crises. Lube production dropped 16 percent between 2013 and 2016 and then fell another 0.2 percent in 2017.”

The piece goes on to note that while the Brazilian market outlook is improving, challenges similar to that hitting the rest of the world will be faced in the coming years. Those include a vehicle population that continues to shift toward hybridization and other evolutions that will see new performance demands of the lubricants in the marketplace. Brazil has some of its own unique attributes, with stop/start technology and the widespread use of biofuels having further implications for lubricants used there, all spurred by major regulatory pushes.

This is all noteworthy because it’s indicative of a global evolution in standards and specifications to which developing markets are increasingly beginning to hold themselves. Lubrizol’s team was on hand at the Meet the Market Conference as well, where we brought our perspectives about the recent heavy-duty market upgrade to API CK-4 and API FA-4 specifications. This upgrade brings the Brazilian market up to the same standard as North America, and reflects the market’s prolific use of biodiesel fuels in the heavy-duty sector. Biodiesels have the effect of causing increased oxidation in the lubricant; the improved oxidative stability and performance of a CK-4 and/or FA-4 lubricant meets the challenge in the marketplace.

Similar situations are popping up in India and China as well, two of the most significant global economies where transportation sectors are rapidly evolving. In India, for instance, the heavy-duty marketplace is in the process of upgrading from a CH-4 quality minimum—a 20-year-old standard—to [something higher]. Further, the Indian government recently decided to cap the life of commercial vehicles to 20 years beginning in 2020. According to the Times of India, this means “vehicles such as taxis, three wheelers, trucks and buses that were registered before 2000” won’t legally be allowed on the road as of April 1, 2020, with all commercial vehicles becoming automatically de-registered as they reach the 20-year mark. It’s part of a major push to eliminate pollution from the country’s roads. Meanwhile, China—the world’s largest auto market—is suspending the production of over 500 passenger car model versions that don’t meet the country’s fuel economy standards.

These are cornerstones of the world and the global economy—and where the vehicle population is changing, so too must the quality of the lubricants used in those markets.

Our view:

There’s the old saying that a rising tide lifts all boats—and it applies here. As some of the largest global auto markets evolve, the use of more modern, higher value lubricants will become increasingly relevant around the world. Some of these markets have historically used much lower-quality fluids, and there is now major opportunity for our industry to upgrade these markets.

The increased use of higher-value lubricants across the world is beneficial for everyone, and we should all be invested in making it a reality.

For more information on the changing lubricant market, contact your Lubrizol representative.

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