George Morvey, Industry Manager, Energy at Kline, said, "Despite a generally flat market and growing competition from national oil companies, independents, and OEM genuine products, Shell has managed to defend its positions in all three market segments and retain its leading market share."
Kline analysis showed that Shell edged out ExxonMobil, its largest competitor, in 2006 via the acquisition of a 75% share in Beijing Tongyi Petroleum Chemical Company Ltd. and Xianyang Tongyi Petroleum Company Ltd., which together produced and marketed China's leading independent lubricant brand. Since then, Shell has accomplished many strategic moves to consolidate its dominance.
The gap between the leading market of the United States and China has been shrinking. However, in 2015, this divide widens due to the contraction in China in the commercial automotive and industrial oils and fluids market segments, as well as the relative stability in the United States. Europe is third to Asia-Pacific and North America, continuing to be the largest market for high quality and high performance lubricants as measured by the penetration of synthetics and low viscosity engine oils. Despite that, European share in global lubricant demand has declined.
Lubricant formulators face a future with reducing API Group I basestock supply, which will also affect the availability of heavy neutrals and brightstocks. Kline estimates that, even with limited new capacity additions, the brightstock market will experience a potential deficit of at least 6.0 KBD by 2025. An increasing Group II/II+, III/III+ supply will affect how products are formulated. Due to reduced Group I availability, increased Group II supply, a marketing push from Group II suppliers, and supply chain cost savings for blenders (lower tankage etc.), Group II has penetrated into a number of automotive formulations not needing Group II (non-API oils), as well as industrial products, such as hydraulic fluid, gear oil, and turbine oil.
The demand for high performance, low viscosity PCMO continues to accelerate in both developed and developing countries, driven by Group II - III+ basestock availability, OEM technical demand, government and industry specs, consumer behavior, and improved maintenance practices.
Kline's Global Lubricants: Market Analysis and Assessment, in continuous publication for 14 years, provides a comprehensive, in-depth analysis of automotive and industrial finished lubricant products, end-use industries, trade classes, major suppliers, and market trends in the leading country markets and regions. View the list of all countries covered.
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the agrochemicals, chemicals, materials, energy, life sciences, and consumer products industries for nearly 60 years. For more information, visit www.KlineGroup.com.
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