Challenges, Opportunities Seen in Western Europe

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November 11, 2017
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Challenges, Opportunities Seen in Western Europe

ANTWERP – Germany and the United Kingdom had the highest lubricant demand among European Union countries in 2016, a new Union of the European Lubricant Industry report found, although the factors impacting demand were different in each country.

“The nature of different economies across Europe is very apparent,” Valentina Serra-Holm, president of the trade group, told ACI’s European Base Oils and Lubricants Interactive Summit held here Nov. 29. “As an industrial heartland, Germany is different in nature to a service-led economy such as the U.K., and lube production and consumption differ in these countries due to the very nature of their economies.”

Germany is the strongest performer in the region, according to the report. “After the financial crisis in 2009, the country’ lube market recovered fast and has stabilized at a high level, confirming Germany as the largest producer in the region,” Holm said. The key to that success has been the ability of German producers to focus on high quality specialty products to meet the increasingly challenging demand of the industry, she noted, especially in niche, high value added applications.

In 2016, German lubricant demand amounted to 960,000 tons. “The market is dominated by industrial lubes, with turbine oils, hydraulic oils and general machine lubricants having decreased [in volume] due to improved efficiency, while metalworking fluids have increased.”

The U.K.’s lubricant sales have not been affected by the economic uncertainty of the country’s planned exit from the European Union, and the country’s total lube sales increased marginally during 2016, the study found. In 2016 lube demand for the country stood at 570,000 tons. Engine oil sales had declined from 1995 to 2010, but the trend then reversed, Serra-Holm observed, due to an increase in initial factory fill oils spurred by the excellent performance of the U.K. automotive industry.

After an initial recovery post-crises, the French market suffered a decline. Volumes generally stabilized since 2014, though the market shrank slightly in 2016. Higher sales of industrial and automotive lubricants was not enough to offset a decrease for process oils In 2016 France consumed around 550,000 tons of finished lubricants.

UEIL found that Spain and Italy have shown similar recovery paths. Driven by the automotive sector, Spain’s lube market grew in 2016, while the Italian recovered both in the automotive and in industrial sectors. In 2016 Spain consumed 460,000 tons of finished lubes, while Italy consumed 440,000 tons.

UEIL is set to publish its first annual statistical lubricant demand report in full later this year.

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