Haulers – primarily dump trucks and other vehicles carrying rock – were the largest motor oil consumer in the road construction and other off-road category, accounting for 43 percent of the motor oils consumed in this category. Road construction machinery, truck cranes and concrete trucks are the main consumers of hydraulic oils.

Geographically, the Central, Southwest and Far East federal districts achieved some demand growth. It is related to the growth of the mineral resources extraction as well as the slight growth of the manufacturing and agricultural works in these districts, RPI said.

The Central Federal District has the largest number of road construction vehicles, thanks to a higher population density and large infrastructure projects such as a ring road around Moscow and the ongoing construction of the Moscow City business quarter, the study said. The Central Federal District accounts for 22 percent of Russias total commercial vehicle lubricant consumption.

Around 85 percent of the motor and transmission oils used in Russian-made construction and other off-road machinery are supplied by the Russian lubricant manufacturers, most of which is supplied by the large lube marketers such as Gazprom Neft, Rosneft and Lukoil, according to RPI.

In the hydraulic oils segment, Shell – which opened its own lube production in Torzhok a few years ago – held around a 14 percent market share last year, while Rosneft, Gazprom Neft and Lukoil claimed 18 percent, 23 percent and 25 percent, respectively. We are expecting Total to gain a substantial market share after its blending plant in Kaluga becomes ready to stream in 2018, RPI said.

The consultancy expects Russian market for road construction and other off-road machinery lubricants to grow 1.9 percent annually by 2019. This [slight growth] is related to the expected lower imports of these oils, and reduction of the vehicle fleets in such categories as bulldozers, excavators, frontal loaders, auto graders, asphalt pavers, scrapers and special industrial tractors. From 2019 onwards we expects the annual growth rate in the lubricant consumption in these vehicle categories to be up to 2.1 percent, RPI said. The consultancy allows for fluctuations in the growth caused by the changes in the currency rates and differences between the output of the Russian made machinery and their imported counterparts.

Demand for motor oils and transmission oils in these vehicle categories will be boosted by increased sales of haulers and dump trucks, and it is expected to rise at annual rates of 2.8 and 2.4 percent by 2030, respectively, according to RPI.

Russian made lubricants used in the road construction and off-road machinery are expected to grow. It is predicted that in 2020 Russian manufacturers could deliver 96,000 tons of lubes used in this vehicle category, while the supplies could increase to up to 145,000 tons in 2030, RPI said, citing decline in demand of imported lubricants and decreased demand for Gost standard lubes as reasons for such growth. Russian lube manufacturers produce less of the obsolete Gost oils and instead produce an increasing number of oils meeting American Petroleum Institute performance standards and the European engine oil specifications from the European Automobile Manufacturers Association (ACEA).

Obsolete Gost standard oils will see a decrease as the obsolete machinery fades from the market. These oils could see an annual decline of 10 percent by 2030, RPI said,

The consultancy predicts that the Russian-made oils used in the road construction and other off-road machinery could push their imported counterparts out of the market because they get more and more original equipment manufacturers approvals and stay competitive in price.

RPIs study is titled, Russias Market of Motor, Gear and Hydraulic Oils for Special Purpose, Road Construction and Other Machinery: Current State, Outlook for 2030. For more information about the RPI study, available in Russian only, click here.