China and India's drive to buy cars is set to fuel the Asian Base Oil market in 2011, according to ICIS.
The latest report from the market intelligence organisation claims that China's import demand is likely to increase by 8.2% in this year, based on a GDP of 9% - having brought in 1.78m tonnes of base oils in the first 10 months of 2010.
Although the Asian oil market will continue to be pushed by the country's massive hunger for cars, China's auto sales are expected to slacken to around 10% growth over the next 12 months.
The Indian market is equally buoyant, thanks to vehicle production of some 14m units in the year to March 2010. The country's demand for finished lubricants is expected to grow, although not as rapidly as China's, at around 3-4% annually.
In terms of suppliers, 2011 will see the emergence of the Middle East as producers of high-quality Group III base oils according to the report. More stringent emissions and fuel economy legislation, as well as an increase in new vehicle sales, is likely to drive the Asian quality oil market, with Group I oils seeing consolidation in the region as many producers upgrade existing facilities.