Shell executives are questioning official figures in light of recession-level demand, but are still bullish on lubes.
Shell's global downstream director Mark Williams said, in a recent interview, that the oil ginat was experiencing the equivalent of recession-level demand for key products such as diesel at the same time as China, one of the largest single markets, was posting official reports of strong growth. William, who sits on the Dutch energy giant's executive board said, “I still expected more suction out of China than we're getting. I'm just a bit uneasy with what we're seeing in terms of fuel demand and chemical demand.”
Despite official reports posting good growth in most sectors and in the economy as a whole, China's power consumption growth slowed drastically last month due to a massive slump in the manufacturing sector. Recent energy figures could foreshadow further slowdown for the rest of the year and could also affect China's energy-rich partners, such as Australia and Iran.
Nonetheless, executive vice president of Shell Global Commercial, Mark Gainsborough, is bullish about lubricants sales in the growing economy and expects 50% of the global growth in lubricants demand to come from China in the future. Shell is investing heavily in China and recently broke the ground on a $100 million lubricants blending plant in Tianjin.