Germany Base Oil Market Outlook

germany is one of the largest consumer markets for base oils in europe, thanks to the sheer size of its population and its large industrial sector. the country is also an important producer of base oils, thanks to the presence of several large domestic refineries. overall, the german market for base oils is a mature market, and one that is expected to remain relatively stable over the next decade or so. the market is forecasted to grow at a moderate compound annual growth rate of 1-2%, largely in line with the size of the overall german economy. in terms of market drivers and key trends, one of the main factors influencing the base oil market in germany is the continuing shift towards lighter-viscosity lubricants. this trend has been driven by oems’ focus on reducing energy consumption and increasing fuel efficiency, which in turn necessitates the use of lighter base oils in formulations. this trend has been particularly pronounced in the automotive sector, and should be a supportive factor for base oil demand in germany over the 2018-2032 period. one of the key development to watch out for is the impact of environmental legislation, especially with regards to hazardous substances. over the last decade, germany has taken steps to reduce the emissions of volatile organic compounds in the air, and has introduced regulations that have had a direct impact on the production and use of certain types of base oils. this has led to the closure of some refineries, and could continue to impact the dynamics of base oil supply and demand in the country going forward. in terms of pricing, the german base oil market generally follows the european union (eu) pricing trends. european refueling and base oil prices have historically been quite stable, particularly since the european commission’s prohibition against price fixing. as such, buyers of base oils in germany can usually expect fairly stable pricing levels over the medium-term. overall, germany represents a fairly mature base oil market, and one that is expected to remain largely unchanged over the coming decade. demand is set to be supported by the ongoing shift towards lighter-viscosity lubricants and the continuing regulatory focus on emissions reductions. pricing, meanwhile, should remain fairly stable.