South Korea lubricant consumption fell to a 10-year low of 990,455 kiloliters (889,627 metric tons) in 2019, the Korea Lubricating Oil Industries Association said in a report last week.
The association, which represents suppliers in the worlds eighth-biggest lube market, blamed the performance on economic friction at home and abroad.
The general economic climate was not good last year, Lim Jongchan, an executive of the association, told Lube Report. With the two trade disputes – South Korea versus Japan and the United States versus China – going on, consumer sentiment went down and economic growth of developing countries slowed down, leading to sharp decline in lubricants sales both for domestic demand and export.
Last years total represented a 4.6 percent decrease from 1.04 million kiloliters in 2018, and the countrys lowest level of lube consumption since 2009, when the end of the Great Recession limited domestic sales to 863,446 kiloliters. In 2019, South Koreas gross domestic product grew 2 percent, the slowest since 2008, according to Central Bank of Korea.
The associations report said sales of automotive lubricants fell 0.6 percent to 358,231 kiloliters; industrial lubricants were down 1.5 percent to 201,542 kiloliters metalworking fluids and rust preventives were up 0.2 percent to 142,688 kiloliters; and marine oils decreased almost 17 percent to 86,062 kiloliters.
Automotive lubricants – accounting for more than one-third of total lubricants consumption in the country – [are] reaching the growth limit due to downward trend in average travel mileage, extended engine oil change interval, rising electric vehicle penetration and so on, the report noted.
The growth rate of automobile registrations dropped to 2 percent last year from 3 percent in 2018. Average yearly consumption of lubricants per vehicle fell to 15.1 liters in 2019 from 15.5 liters. South Korea’s lubricants consumption has remained near the 1 million kiloliters per-year level for the past 20 years.
Domestic production of finished lubricants dropped 8 percent to 1,504,228 kiloliters in 2019. Exports declined 11 percent to 552,416 kiloliters. Koreas main export destinations were China (15.9 percent of all exports), Mexico (15.8 percent), Japan (14.6 percent), Russia (5.7 percent) and Vietnam (4.8 percent).
Imports of lubricants, however, grew 1.3 percent to 38,512 kiloliters. Those imports – mostly process oils and automotive oils – were mainly from the U.S. (29.9 percent), the United Arab Emirates (15.7 percent), Japan (13.2 percent), Belgium (6.2 percent) and Indonesia (5.4 percent).
As for 2020, the association forecasts a similar level of domestic consumption at most, due to a bleak outlook on the economy and the ongoing coronavirus epidemic. The Bank of Korea predicted the national economy will expand 2.2 percent this year.
The association has published its annual lubricant reports since 1986 based on sales data from member companies and on factors including economic growth, exports, imports and marine freight traffic.