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The price has risen again!
The author once thought that the price increase of commodities last year was difficult to maintain until this year, who ever thought that a war has caused a shortage of commodities around the world, potash fertilizer, natural gas, and the price of crude oil, one rise faster than the other. Don't forget, during the epidemic, can the price of oil futures have a negative number? At that time, if you had made a big bottom, you must have achieved financial freedom now (good acid).
Taking oil prices as an example, the rise in oil prices themselves will also trigger a butterfly effect. Since mid-February, more than twenty lubricant factories (traditional players such as Mobil, Castrol and Shell) have issued price increase notices, with the toughest players adjusting the increase to 20 percent.
Lubricant price increase explanatory letter
Behind the increase in the price of lubricating oil, the price increase of raw materials is absolutely inseparable. As a link in the industrial chain, no one can be alone. In addition, the impact of the epidemic is far from over, and the upstream refineries have seen production cuts and shutdowns from time to time, and the superimposed supply has been poor, which is the driving force behind the rise in lubricant prices.
So, when an avalanche occurs, not a single snowflake is innocent. However, thinking about it, the rise in oil prices has also indirectly made the new energy vehicle market have a stronger growth space, and the "double carbon" strategy may be realized earlier, and it is also a blessing due to misfortune.
Today, we will take a look at the lubricant industry and look at the investment value and logic of this track.
First, additives, so that lubricating oil like a tiger wings
Straight to the point, what exactly is in the lubricating oil? In general, there are 80% base oils and 20% additives in it. As the name suggests, base oils play a fundamental role in lubricants, such as viscosity indicators.
Lubricating oil composition
Friends who often drive must know that when the car starts at low temperatures, because the power of the engine is not very sufficient, it is necessary to make the viscosity of the lubricating oil lower and reduce friction losses. When the engine is running at high speed, the lubrication effect is also guaranteed, and the motion viscosity should be high enough. So now players are more introducing multi-level lubricants, good horses with good saddles.
Of course, base oils are the foundation after all, and additives are the crown jewels. So the author will put more energy into it later.
Additives are to say that they provide other indicators in addition to viscosity, such as waterproofing, corrosion prevention and the like. If the industrial chain of additives is opened, the cost of raw materials in the production cost of lubricating oil additives accounts for about 90%, the additives themselves are also diverse, and the downstream applications are widespread, in addition to the most important automotive fields, ships, machinery and equipment, aerospace can see its figure.
Lubricating oil additive industry chain
Second, what is driving, and what is restricting
If the lubricant additive industry is summed up in one sentence, it is that the market size is large and mature, and it can grow steadily.
In the seven years from 2012 to 2018, the demand for additives increased from 4 million tons to 4.42 million tons, and the market size increased to 14.3 billion US dollars (nearly 100 billion yuan market). And according to the agency's forecast, in 2023, the demand for additives will climb all the way to 5.43 million tons.
Growth of additive market size (CNKI)
Even if the growth rate of car ownership in these two years has not been the same as that of five or ten years ago, there is still room for steady growth in demand for lubricants as the total mileage of cars increases.
Not only that, according to the idea that green water and green mountains are golden mountains and silver mountains, the introduction of national six emission standards has made additive players happy to blossom (all vehicles have implemented the national six a standard since the second half of last year, and it will be china six b from July next year). How to say? This allows players to focus more on developing high-quality lubricants, which in turn increase the amount of additives used, which are essential for exhaust gas treatment units.
Attacking the high-end market is a structural opportunity!
Emission standards are more than one wave
Speaking of this, you may also feel that although the proportion of additives in lubricating oil is not high, there are still high technical barriers. Because the downstream market itself is diversified, this also makes many domestic small and medium-sized additive players look at the door and sigh, and players with long-term deep cultivation in the industry can easily establish their own moat.
And additive players to obtain the "heart" of lubricating oil manufacturers, but also need a long certification process, once into the "marriage" hall, basically no longer appear emotional breakdown, which is also very unfriendly to newcomers.
The three and four heavenly kings gathered together
Speaking of players on this track, it is clear that the "law of two and eight", the four major lubricant additive companies (Lubrizol, Runin Union, Chevron Oronnay, Afton) occupy about 85% of the global market, and all come from the United States, and the product categories are particularly rich. Go your own way and leave others with nowhere to go.
To talk about their growth path, they have also experienced many mergers and reorganizations, and the story of big fish eating small fish is particularly remarkable here.
The mainland's independent players are mainly rolled in low-end products, and high-end products still need certain imports to meet demand. Ruifeng New Material (300910), which is known as the first share of A-share lubricant additives, has also experienced a single-quarter performance decline of more than 40%, and it is not so simple to move from low-end to high-end (such as compound additives).
The current trough, the future look back may be an opportunity. Therefore, the track of lubricating oil can be waited for slowly, which is still a process of upgrading from primary products to high-end products. At present, who has a high market share in the domestic market is the winner.
Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.