In recent days, domestic base oil prices have risen again, or about 500 yuan per ton. It is understood that after entering 2011, the base oil will enter the rising channel with an increase in price. Since January 2011, the base oil price has been raised several times in a row, with a total increase of 1200-1600 yuan/ton. Moreover, the current price of base oil still keeps rising.
The international oil price is running at a high level, and the production costs of various oil refineries have increased dramatically, making the base oil market surge. Base oil is the most important raw material for lubricating oil production, and it accounts for an absolute percentage of the finished lubricating oil composition. Many of them reach more than 90%. The price of base oil has risen and the cost of other production has increased. The pressure on the cost of lubricants producers under “rising prices†has surged and the lube market has entered a high-cost era.
As the market enters a high-cost era, it is difficult to withstand huge cost pressures, and it is more and more realistic to rise due to the market. Enterprises that rely on price wars are in desperation. At present, some small and medium-sized lubricant companies have had to stop production or switch to dormancy. Although most lubricant manufacturers are still stubbornly resisting the upswing and maintaining production, the “price increase†has always been a curse on these companies.
The successive increase in base oil prices and the sharp increase in production costs are the “culprits†for further stimulating the rise in the price of lubricating oil, and the lube market will once again set off a wave of price increases.
For most lubricant manufacturers, in addition to facing the “price increase†reality, it is necessary to crack the “cursed price†curse and seek to survive in the high-cost era. Business passes to the future.
Technology Upgrade: Cracking the Curse of Being Cursed by Price Increases
Li Liangyao, deputy general manager of Sinopec Lubricants Co., Ltd., said: “The high base oil operation, high production costs, technical upgrading, and providing consumers with more value experience are the way out for lube oil production companies.â€
Nowadays consumers are more and more rational, and the behavior of brand consumption is also increasing. Although, like all lubricant manufacturers, Great Wall, Shell, Mobil, and other big brands can hardly get rid of the impact of “increased price†curse, the added value of these brands to consumers is offset by some The negative effect of price. Especially in the trend of high-end demand, the upgrading of technology and product upgrades have become a good way for these brand companies to crack the “high price†curse.
In 2010, the low-carbon trend was surging, energy-saving and emission-reduction policies were firmly rooted in the people's minds, and the trend toward high-end product demand became more and more obvious. “Upgrading†became the main theme of the lubricant industry, and the cost drama increased the urgency and necessity of product upgrades. Become another driving force for product upgrading.
It is understood that the Great Wall Lubricant Jinjixing SN/GF-55W-30 engine oil was recently certified by the American Petroleum Institute (API) SN and ILSACGF-5, and became the world's first batch of SN-certified oil products. Not only Great Wall Lubricants, Shell, Mobil, Castrol and other lubricant production companies have also launched SN oil products, becoming the highest specification of the automotive oil market after replacing SM. As a result, it not only satisfies the needs of high-end consumers, but also becomes an important measure to help energy-saving and emission reduction, and provides consumers with more value.
Needless to say, the “price increase†will wipe out the price warfare tactics pursued by small and medium sized lubricant companies. With the overall market price continuing to rise, value warfare will become the theme of the industry. For those lubricant manufacturers with technical and brand advantages, this is probably an opportunity after being “price increasesâ€.
Structural Optimization: Cost Control Against "Price Increase"
Cost control has always been an important goal of business management. This is especially important when production costs are getting higher and higher.
Technology upgrades and product upgrades can provide consumers with more value and reflect the structural adjustment and optimization of the lubricant industry. In fact, whether it is the upgrading of product structure and sales structure, or optimizing the production process and strengthening internal management, it is a necessary measure to cope with the rising price of base oil. In addition to the former product upgrade, the former is also reflected in the upgrade of the sales system. The improvement of channel systems such as maintenance stores, gas stations, and supermarkets provides consumers with great convenience, and they have to obtain channels to make the world a faster consumer of lubricants. Next, this is undoubtedly the guarantee to win the trust of consumers; while the latter is mainly reflected in the cost control, in order to deal with the increasing cost pressures.
Since Great Wall, Shell, Meifu and other lubricants production enterprises have large-scale base oil production capacity, these lubricant companies can form a complete industrial chain from raw material procurement to terminal sales, which is conducive to optimizing the production process and strengthening internal management. Control costs. For example, Sinopec Lubricant Company has five base oil production bases in the country and distributes them in key areas in China. This lays the foundation for Great Wall Lubricant's optimization of resource allocation and helps reduce transaction costs and transportation costs. Moreover, with the advancement of technology, among the base oils produced by Sinopec Lubricant Company, the number of low-grade MVI base oils is decreasing, and more and more high-quality hydrogenated base oils are being used, which will help improve product quality and win the trust of consumers. This is also an important part of the control of Lubricants' lubricant costs. Cost control can partially absorb the negative impact of high costs, while the undigested part translates into a smooth price of the product. In other words, even if it is imperative to make a choice of product prices, companies can control the increase by reducing costs and reduce The impact of rising base oil prices on consumers.
The global economy showed a recovery trend in 2011, which provided a good economic environment for the growth of lubricants demand. The so-called good and bad, the economic recovery has stimulated the growth of oil demand, coupled with a number of factors such as the political turmoil in some areas, resulting in oil prices rising steadily leading to rising base oil prices. Lubricants have been "rising prices" to bring more survival and development pressures to lubricant manufacturers. The only solution is to work hard, carry out technological innovation, upgrade products, strengthen internal management, reduce costs, and increase " Resistance to strength ".
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