Speaking at the UEIL Annual Congress in Budapest, Hungary, on 25 October 2018, Szabolcs Vida, managing director of MOL-LUB Ltd., which is part of the integrated oil company, MOL Group, offered an insight into “Base Oils and Lubricants in Hungary and Neighbouring Markets.” MOL Group has a long heritage in lubricants with its predecessor company established 110 years ago. The company now has 26,000 employees, two petrochemical plants and four refineries in the region and produces lubricants, greases, chemicals, and additives.
Hungary is a country with a population of 10 million inhabitants and a GDP per capita of approximately Euro 11,000 (USD12,532) per year. The nation shares similarities in economic terms with the Czech Republic, Slovakia, and Romania and has a common history. Vida says the Industrial Product Index in these four Central and Eastern European (CEE) countries is 4%, and Hungary has also enjoyed a 4% rise in GDP in 2017.
The lubricant market in Hungary has only recently rebounded from what was a “huge economic collapse” during the global recession. It has taken almost 10 years to get back to pre-crisis levels, with the lubricant market reaching 65 kilotonnes (KT) in 2016, still significantly lower than the 120 KT market size in 1988 – prior to the Soviet-type heavy industry collapse.
Industrial lubricants cater for the majority of lubricant demand in Hungary with 52% of the overall market in 2017. Commercial vehicle lubricants (29%) and passenger vehicle lubricants (19%) deliver the balance.
Vida highlighted an economy with three dominant sectors: industry including energy (27%); trade, transportation, accommodation, and food services (18%); and public services (18%). Automotive remains a key industry in CEE countries, now and in the future, he says. Hungary has welcomed a recent upshift in investments in the region, Vida noting the recent announcement by BMW of a brand-new factory in the Central European country.
Base oil production in the core CEE countries consists of primarily Group I, with a total of 245 KT supply, and 82 KT of Group I demand. The region can cover market demand and export some oils out of the region. However, with Group 2 and Group 3 base oils there is a misbalance and products are imported from the U.S.A., Asia, and Europe to cover the shortfall, says Vida.
There is some “rather limited” additive production in the region. MOL Group is strong in aluminum complex grease thickeners, and are the market leader in Europe in this region, he says.