Group 1: Core Insights - The core composition of lubricating oil consists of base oil and additives, where base oil is the primary component determining the fundamental properties of the lubricating oil, while additives enhance and improve the performance of base oil [1] Group 2: Changes in China's Base Oil Capacity - The rapid expansion phase of China's base oil capacity has ended, with total capacity expected to reach 21.82 million tons per year by the end of 2024, reflecting a compound annual growth rate (CAGR) of 1% from 2020 to 2024 [3] - The growth in base oil capacity is shifting towards larger-scale production and the development of higher-grade base oils, such as Class II and Class III base oils [3] - A decline in base oil capacity growth is anticipated in 2024, primarily due to the removal of ineffective capacity and the shutdown of long-idled recycling oil facilities [3] Group 3: Regional Distribution of Base Oil Capacity - In 2024, the East China region is projected to have a capacity of 8.83 million tons, accounting for 40% of the total capacity, making it a major consumption area for base oil products [5] - The East China region benefits from favorable transportation conditions, facilitating the input of raw materials and the output of products, which supports the upstream and downstream industrial chain [5] Group 4: Supply and Demand of Lubricating Oil Additives - Domestic production of lubricating oil additives has increased from 583,000 tons in 2015 to 878,000 tons in 2022, with a CAGR of 6.02% [8] - The apparent consumption of lubricating oil additives in China was approximately 950,400 tons in 2022, with an annual average growth rate of 2.24% from 2015 to 2022 [8] - Preliminary estimates suggest that by 2024, the production and consumption of lubricating oil additives in China will reach 987,000 tons and 993,500 tons, respectively [8] Group 5: Impact of Supporting Industry Layout on Lubricating Oil Development - The layout of the base oil and additive industries significantly influences the development of the lubricating oil sector, as the quality and stability of base oil supply directly affect the performance and cost of lubricating oil [10] - China's increasing base oil production and decreasing reliance on imports provide a more stable supply of raw materials, which helps stabilize costs and ensure production [10] - Continuous technological advancements in the additive industry and accelerated domestic substitution processes enhance the overall competitiveness of the lubricating oil sector [10]