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The global lubricants market size was valued at USD 115.87 billion in 2021. The market is projected to grow from USD 117.31 billion in 2022 to USD 131.33 billion by 2029, exhibiting a CAGR of 2.3% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with lubricants experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 10.2% in 2020 as compared to 2019.
Lubricants are fluids, oils, or greases that reduce friction between two surfaces in close proximity. These fluids are crucial in automotive and industrial applications as they reduce friction between the moving elements. They are also utilized to prevent corrosion, oxidation, and thermal stability in industrial parts. The growing competition among prominent industry leaders has aided market expansion over time.
Major manufacturers are heavily investing in the global market to stay ahead of the competition. In January 2021, Shell completed the re-acquisition of Idemitsu-branded lube business. With this acquisition, Shell continues to develop and expand the lubricating product business in Japan by utilizing its reliable technology and expertise.
Production Halts in Industrial & Declined Automotive Sales to Confine Market Growth
Extensive lockdown in critical manufacturing areas, such as metalworking, fabrication, oil & gas, chemicals, and consumer products, throughout all regions during the COVID-19 pandemic resulted in a short-term output halt. As a result, demand for lubricating oils in the industrial sector dropped dramatically. However, once the lockdown was gradually lifted, the industrial sector could resume partial operations. Due to the ongoing epidemic, the industrial sector will take longer to reach full capacity. This reduced consumption even more.
Furthermore, COVID-19 had a significant impact on worldwide automotive production. According to the International Organization of Motor Vehicle Manufacturers, global vehicle manufacturing dropped by 16%. Furthermore, as most owners worked from home, they rarely utilized their cars or bikes, significantly reducing consumption. As the vehicle sector consumes the most lubricating oils, decreased sales and usage of vehicles slowed the market growth.
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Rising Demand for Synthetic Lubricants to Aid Market Growth
The global market for synthetic lubricants for large-scale enterprises has grown due to greater awareness about alternatives for mineral oil-related items. The rising automotive sector and industrial growth are expected to surge synthetic oils demand during the forecast period. Synthetic varieties have grown in popularity due to their better efficiency than natural mineral oils. They have progressively begun to replace natural mineral oils as the preferred choice in various industries that demand high levels of consistency. Polyalphaolefin is the most prevalent synthetic base oil used in industrial and automotive applications. As a result of their intrinsic physical and chemical features, they have lower volatility, higher viscosity index, lower pour point, and enhanced oxidative/thermal stability.
Increasing Demand for Better Lubrication from Industrial Sector to Drive Market Growth
With the increasing energy cost for powering industrial activities, the industrial sector is making efforts to cut energy consumption and operational costs. Engine parts that aren't lubricated are more prone to friction, which means they use more fuel, resulting in pollution and emissions. A good grade product helps achieve the same by reducing friction between parts and enhancing machine efficiency.
According to independent testing conducted by 'The National Lubricating Grease Institute’, gears lubricated with synthetic lubes have less friction due to their superior density, viscosity, and molecular weight. Also, attributed to lower churning losses at lower temperatures and less gear erosion, PAG & PAO-based gear lubricants help reduce maintenance costs in cylindrical gears.
Attributed to higher energy cost, even a little reduction in energy consumption can result in significant financial savings. The potential for energy savings varies depending on the type of machine in use. It can raise a company's overall earnings by significantly improving the lubrication. Rapid industrialization and stringent environmental restrictions on manufacturing businesses are expected to propel the global lubricants market growth.
Increasing Adoption of Electric Vehicles to Confine Market Growth
The automotive industry contributes significantly to consumption and growth of the global lubricating products business. Various oils are used in traditional automobiles to maintain engine quality over time. However, as the demand for crude oil grows, so do environmental concerns. Consumers in developed and emerging countries are becoming more interested in electric vehicles. Furthermore, as technology advances, the benefits of electric vehicles become more apparent. Electric car adoption is expected to slow the growth of the automobile industry.
According to the International Energy Agency, China accounted for 3 million sales of electric vehicles in 2020, up by 40% from 2019. It is the world’s largest and fastest-growing electric car market and a global hub for electronic and electrical component manufacture. Leading electric vehicle manufacturers, such as Tesla, are investing in the Chinese market to take advantage of the sector's potential. Electric vehicles are also becoming increasingly popular in industrialized countries such as the U.S and Japan along with Western Europe.
High demand from Automotive Segment to Generate Highest Revenue
On the basis of type, the market is categorized into automotive oils, industrial oils, marine oils, and process oils. The industrial oils segment is further sub-categorized into hydraulic fluid or oils, industrial gear oils, metal working fluids, greases, and others. The automotive segment is expected to hold the largest lubricants market share, owing to the escalating demand for engine oils, gear oils, transmission fluids, & coolants from the automotive sector. Economic growth in developing countries is further increasing the ownership of vehicles, which will spur the demand.
However, the overall type segment is expected to showcase a steady growth in developed countries such as the U.S. and Japan. Due to rapid industrialization in developing countries, the industrial oils segment holds a significant share in the global market. Industrial oils are used in various equipment to improve the performance level of components. They are primarily used in gear, compressors, turbines, and other processing equipment.
Lower Cost of Mineral Grade Products to Exhibit Growth
Mineral grade is the most often used product since it is less expensive than synthetic and semi-synthetic alternatives. Furthermore, it is made from crude oil and manufactured in vast numbers for usage in various sectors, including metal and mining, oil, and others. Mineral grades come in light and heavy steps and their use is entirely based on the end-use requirements.
Base oil, thickeners, and additives are all used in synthetic ones. They have several benefits over mineral-based products. They give additional weather protection, enhance fuel-efficiency, prevent oxidation, and increase engine power significantly. The synthetic segment is predicted to develop rapidly throughout the forecast period due to these rising advantages. Semi-synthetic oils, also known as synthetic blend oils, include a tiny percentage of synthetic oil blended with mineral oils to improve their qualities without raising the price. Semi-synthetic oil performs better at lower temperatures, which is expected to increase its demand in automotive applications.
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High Demand from Automotive Segment to Boost the Market Growth
The automotive segment held the largest share in the global market. The segment is anticipated to showcase rising demand over the coming years due to customers' rising possession of passenger cars. In the automotive sector, lubricating oils reduce the friction between two components of the vehicle. They also help control the temperature by absorbing the heat generated by the moving parts.
Global demand for general industrial oils is predicted to rise as the world becomes more industrialized. They are made to keep the machinery functioning optimally at high speeds. They are widely utilized in various sectors, including manufacturing, oil and gas, and food processing. The other applications include marine, military, and aviation. Marine lubricants are designed for high, medium, and slow-speed marine engines. These are also used in the aviation industry in various applications such as gears, piston rings, bearings, and others.
Asia Pacific Lubricants Market Size, 2021 (USD Billion)
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The global market outlook is predicted to remain strong in Asia Pacific during the forecast period, owing to the rising demand from the industrial and automotive sectors. The market size of Asia Pacific was USD 51.89 billion in 2021. Factors, such as rising population and increased investment in various industrial sectors, are driving the market. The growing population is surging the demand for automobiles, which, in turn, is surging the demand for automotive oils. In the global market, Asia Pacific is predicted to develop the fastest. Due to rising demand from the automotive sector, China, Japan, and India are the primary countries contributing to the region's market growth. Owing to the region's economic diversity, progressive corporate attitude, rising household income levels, and perhaps most importantly, the region's latent potential to evolve into one of the world's top economies in the future, ASEAN is an exciting market for investment. The range of manufacturing sectors in different ASEAN countries and their varying growth trajectories provides a spectacular and ever-changing market, with potentially lucrative niche opportunities emerging for companies that can capitalize on the trend.
The automotive industry dominated the market in North America. The U.S. comparatively has a large automobile sector that led to the market's tremendous rise. Furthermore, the industrial sector has shown constant expansion and is likely to continue in the following years. North America consumes a lot of environment-friendly items as a result of strict environmental protection legislation. Large important firms, such as ExxonMobil Corporation, Royal Dutch Shell, and Chevron Corporation, are present in the U.S. The market has been characterized by severe competition as all major industry participants are focused on developing their customer base to gain a competitive advantage over other companies in the ecosystem.
Europe is expected to be the market's fastest-growing region. The market in this region is likely to be driven by the increasing development of high-end machinery and equipment for industrial applications. In addition, the market is expected to grow due to the rising demand for equipment flexibility and the need to improve vehicle efficiency.
Several European countries have strict regulations regarding the use and disposal of lubricating oils, which has significantly increased the demand for bio-based lubricants. During the forecast period, the need for technically advanced products will rise in the area due to continued advancements in the automobile industry.
The economic slump has impacted Latin American demand negatively, but it remains above average due to the automotive industry's requirements. Brazil and Mexico, the two largest vehicle markets in Latin America, make up the Latin American automotive sector. The two countries struck a free trade agreement on selling light commercial trucks and auto parts.
Heavy vehicles (trucks and buses) will be included in the agreement effective in 2022, resulting in lower quotas and fees on exports and imports.
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The Middle East is rapidly developing, yet, the dynamics of the petroleum industry mainly determine the region's development. Despite socio-political turmoil, the region's vast oil and gas reserves make it a vital industry element. The drop in crude oil prices caused an economic slowdown, but countries have improved their economies, which bodes well for future demand for lubricants. In Africa, increased car usage and a shift in the middle-class population produce potential demand for automotive oils. In addition, government regulations and OEM requirements are pushing the industry forward.
Market Players to Strengthen their Positions by Offering Various Solutions
The major producers are located in Europe, but the demand is high in Asia Pacific. It is leading to the creation of a consolidated market. The producers in Europe and North America are continuously engaged in acquisitions and mergers to strengthen their market position and drive business growth. As a result, the key players in the market have developed strong distribution channels, regional presence, and product offerings. Manufacturers, such as Shell, ExxonMobil, and Total, focus on introducing products and strengthening distribution channels to serve the industrial consumers better.
An Infographic Representation of Lubricants Market
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The global lubricants market report offers a thorough analysis of the lubricants industry, focusing on elements such as types, grades, and applications. Apart from that, the report provides information on key market trends and significant industrial developments. In addition to the variables above, the study includes several others contributing to the market's recent expansion. The competitive landscape section offers detailed profiles of the leading market players operating in the market.
Volume (Kilo Tons) and Value (USD Billion)
By Type, Grade, Application, and Geography
Fortune Business Insights says that the global market size was USD 115.87 billion in 2021 and is projected to reach USD 131.33 billion by 2029.
In 2021, the Asia Pacific market value stood at USD 51.89 billion.
Growing at a CAGR of 2.3%, this market will exhibit steady growth in the forecast period (2022-2029).
Automotive segment is expected to be the leading segment in this market during the forecast period.
The growing need for smooth and effective functioning of machines is driving the market growth.
Asia Pacific held the highest market share in 2021.
The rising demand for synthetic lubes is expected to contribute to the growth of the market during the forecast period.
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