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Zhuoli lubrication: the lubricant industry will be “flat” after two years
- 2018-09-29-

According to the judgment of Zhuoli 's lubrication, the lubricant industry is really worthy of attention, and it can be said that it is an exciting trend. After two years, private and foreign lubricant companies will be fully qualified to compete with the “Petrochemical Double Heroes”. -The world is flat!

Low carbon economy and lubricant upgrade

Why do Zhuoli's lubrication say this? This is starting from a hot topic in the near future - "low carbon economy."

We know that the reason why the low-carbon economy has recently received much attention in China is because China has indeed become a polluting country. Hu Angang, director of the National Studies Center of Tsinghua University, pointed out at the end of last year that China’s sulfur dioxide emissions accounted for the world’s total. 32.9%; NOx emissions account for 20.7% of the world's total emissions, and particulate matter emissions account for 33.5% of the world's total, which is one of the world's total; on the other hand, developed regions have been taking China's pollution emissions since last year. "The EU and the United States have already threatened to levy a "carbon tariff." Once carbon tariffs are imposed, China, which is already a big exporter to the world, will undoubtedly have a rather adverse impact in the short term.

Then, how to fundamentally address the challenges of environmental pollution and trade barriers, and fundamentally create a healthy and livable “low-carbon economy”? The effective way is to continuously improve the threshold of technological innovation and related regulations and standards. To control and reduce overall greenhouse gas emissions. The Chinese government has promised that by 2020, greenhouse gas emissions per unit of GDP will fall by 40% to 45% compared to 2005. According to this goal, as one of the main sources of greenhouse gas emissions, vehicle exhaust emissions will be subject to more stringent control in the future - following the National III emission standards two years ago, the National IV emission standards are expected to Full implementation in 2011 or 2012, and the implementation of this standard will bring a “big shock” to the entire lubricant industry, and will eventually bring “Petrochemical Double Heroes” to the same starting line as private and foreign-funded enterprises. .

The National IV Era of "Everyone Is Equality"

Why does Zhuolii Lubrication say this? We know that in the lubricant industry, compared to many private enterprises, the advantage of “Petrochemical Double Heroes” is that they have relatively low-priced Class I base oils and internal subsidies. Policy and internal price settlement mechanisms, so the price of finished low-end lubricants can be made lower than all lubricant brands. Moreover, in order to control the supply of base oil to private brands, their base oil refining equipment only maintains a operating rate of around 70% per year, which is “deliberate”. However, once the "National IV era" comes, this advantage will not be reproduced: after the implementation of the national IV emission standards, diesel vehicles must use CI-4, CJ-4 grade diesel engine oil, cars must use SM grade motor oil, For these good lubricant products, the base oil used must be a base oil of Group II and III.

What is the current production of Group II and III base oils in “Petrochemical Double Heroes”? It only accounts for 10% of the total base oil production. With such low production, it is impossible to support large-scale production of good lubricants. Moreover, even if the “double males” start to “get up and catch up” from now on, and try to increase the production of II and III base oils, the results will be very limited, due to time, technology, raw materials, systems, sites, etc. The restriction caused by the internal price settlement mechanism is also not sustainable. The low price and resource consuming practices of “double males” are not sustainable. Moreover, a large number of Class I base oil production capacity and resources will become a burden from the development of private lubricant companies to become their burden. Even in order to consume these resources, we have to do low-end products, resulting in low-end brands.

It can be seen that its future choice is to import Class II and III base oil resources from abroad for the production of good lubricants. This is the common practice of private lubricant companies in recent years. That is to say, as CI-4, CJ-4, and SM products become the mainstream of lubricant consumption after one to two years, “Petrochemical Shuangxiong” will have to substantially increase the proportion of base oil imports, thus at the price. The cost has returned to the status of “flat and equal” with private and foreign lubricant companies.

Zhuoli lubrication - a godsend opportunity for private oil companies

For private lubricant companies, this can be said to be a “Tianci opportunity”: over the years, due to the restrictions on access to low-cost Class I base oils, it has been difficult for private enterprises to compete directly with state-owned monopolies at the price level; The main raw materials of lubricating oil are turned to the II and III base oils with sufficient supply in the international market. The private lubricating oil enterprises will have the strength to compete with the “Guo Zihao” opponents in price. At the same time, private lubricant enterprises should also use product upgrades. This opportunity has further improved the quality of its products; currently, in the industry, a few companies have taken the lead and started to actively carry out internationalization including raw material procurement and advanced technology introduction. The development practice of many domestic industries proves that the more comprehensive the competition, the higher the overall development level, and in these industries, the dynamic, creative and growth are private enterprises, whether it is the Alibaba of the IT industry. BYD in the automotive industry, Galanz and Midea in the home appliance industry all confirm this truth. Therefore, in the lubricant industry, there is hope in the future to become the "star of the industry", and it is still a non-private enterprise. If we say that in the era of low-end products in the past, due to the lack of its own raw material resources, the vitality of private lubricant companies has been controlled to a certain extent, then, with the national IV standard to be fully implemented, high-end products become lubricated. The main sales force in the oil market, PetroChina and Sinopec gradually lost their advantages in the price of base oil raw materials. Zhuoli Li felt that private and foreign lubricant companies will completely get rid of the disadvantageous position in the competition and usher in a golden age of comprehensive development. ".