Klein Company pointed out that the slowdown in economic growth and government regulations are the drivers of the changes in the Chinese market. It is expected that China's gross domestic product will expand at an annual growth rate of approximately 4.5% in the next five years, which is significantly lower than the double-digit growth rate in 2003-2011.
The domestic lubricants market will shrink by 0.4% annually on average
At present, the industrial and commercial sectors are enhancing the modernization of equipment and teams through a large number of integrated actions, which also drives them to seek better lubricants and services to reduce overall costs and ensure their profit margins.
The protection of profits by consumers and businesses is also reshaping the market structure of lubricant suppliers. The large local companies and multinational companies that used to occupy the market, their market share is gradually being shared by small companies.
As the economic downturn has caused consumers to look for lower-end and more cost-effective products, the local independent producers have thus won the development momentum and successfully increased their market share in the consumer, industrial and commercial sectors.
Domestic large companies that once provided low-, medium-, and high-end lubricants will mainly provide high-end products by 2020. This makes the market's low-end lubricants mainly provided by local small businesses.
Multinational companies have begun to sell more directly to major customers, and local giants do so. They provide direct customers with more direct sales and personalized services, while multinational companies are more adept at technology, such as lubricants management projects.
However, the economic slowdown has not prevented the government from passing regulations to promote the evolution of products in the automotive and industrial sectors. The Chinese government has issued a policy requiring the replacement of existing obsolete equipment with higher speed and more durable modern equipment.
The automotive industry is also evolving for product evolution. To cater to global trends, China's automotive lubricant marketers are committed to producing products that can help vehicles improve fuel economy and meet more stringent emission standards.
In 2016, China’s auto sales exceeded 28 million, an increase of approximately 15% over the previous year, exceeding the US’s sales of over 10 million vehicles. A growing middle class, western urbanization and government stimulus policies have all helped to increase car ownership. Since 2003, the growth rate has reached double digits. The increase in urbanization clearly has a direct impact on the Chinese lubricants market.
Traditionally, China's coastal areas represent a large part of the demand for lubricants, with a share of more than 50% in 2015. However, the central and inland regions have the largest GDP growth, which also increases the demand for lubricants in the region. Of course, coastal areas are expected to still account for a considerable proportion of lubricants.
Kline believes that the severe impact of the Chinese government on environmental regulations has a significant impact on the market. In addition to the implementation of the National IV emission standard and the introduction of the National V in 2017, this refers to the Euro IV and V emission standards, respectively. The government will encourage green transportation and infrastructure, and the manufacturing industry will also shift from low-value-added commodities to high-value-added goods and services.
Although market demand is expected to shrink to 6.9 million tons by 2020, the Chinese market will remain one of the world's largest lubricants markets. Kline estimates that China’s current market value is about 26 billion U.S. dollars. In terms of quantity, industrial lubricants dominate, with a market share of close to 50%. In terms of currency value, the dominant consumer goods sector accounts for about the same percentage.
According to Klein data, after the merger, the demand for lubricants in the commercial and consumer products segment was approximately 3.9 million tons. Engine oil accounted for about 70% of the total demand, of which heavy duty diesel engine oil accounted for less than 50%, passenger car engine oil is about 25%. The portion of industrial oil, mainly processed oil, totaled 3.1 million tons. The consumer goods sector has seen the fastest growth. This trend will continue into 2020.
We are manufacturer of heat treated steel pipes include quenched and tempered steel pipe, normalized steel pipe and annealed steel pipe among carbon steel pipe and alloy steel pipe. Our advantages and more services of heat treated steel pipes includes:
1) Wide range of sizes, out diameter from 20mm to 100mm
2) Customized Length from 100mm to 12000mm
3) Good surface roughness: 0.4um to 1.5um
4) Good straightness: 0.5mm/m to 2mm/m
5) Matched further processing: Grinding, polishing, straightening
5) Anti-rusty package
7) Full sets of testing equipment: Surface, Dimenstion. Mechanical properties testing
8) Fast delivery time
Quenched and Tempered Pipe,Quenched and Tempered Steel Pipe,Quenched and Tempered Steel Tubes,Qt Steel Pipes,Qt Steel Tubes
SHANDONG LE REN SPECIAL STEEL CO., LTD. , https://www.sdhighstrengthsteelbolts.com