Global Market Outlook on Lubricants

  • Global lubricant supply stands at 36.4 MMT in 2016. Demand is expected to grow at a CAGR of –0.5 to –1.5 percent CAGR until 2020 
  • Demand from the automotive sector and industrial sector is expected to lead the industry growth 
  • About 2.2 MMT of capacity was added globally during 2016, and 1.5 MMT of capacity was removed, globally, during the same period. Emission regulations, improved quality and OEM requirements will have an impact on the demand of lubricants. Lubricant recycling programs will also impact the demand and supply of lubricants base stock in the market, affecting the prices


Demand Market Outlook

Lubricant prices and availability is highly driven by the lubricant stock (base oil) in the region. The US and Europe have shifted their base oil stock to Group 2 and Group 3 stocks respectively, while Asian and LATAM markets continue using Group 1 and Group 3 stocks

Industry Best Practice

Asia Pacific’s market for lubricants will be driven by the growing population of the region, coupled with the rising economic level. Markets in North America and Australia are expected to decline, as they are mature markets, and due to the decline or average growth in production and sales of vehicles and demand moving away from mineral oil lubricants

Supply Risk–Low 

  • A modest demand growth of 1 percent surplus capacity and weak margins have made base oil market a buyer’s market in 2015
  • With the declining growth of demand of lubricant oil, inefficient refineries will close down and the market will move towards consolidation. By 2021, there will be fewer and diverse product offering suppliers controlling the market The lubricant category is expected to shift from leveragein 2015 to strategicby 2021

Global Market Size: Lubricants

  • The global lubricant market reached $148 billion in 2016, and it is projected to reach $167 billion by 2021 
  • APAC remains the largest market for lubricants. MEA has seen the fastest growth of lubricant demand 
  • The increasing number of passenger, commercial vehicles, and more disposable income in the developing economies would drive the lubricant demand in the upcoming years 

Global Supply–Demand Analysis

  • Global lubricant supply stands at 36.4 MMT for 2016. The market is oversupplied on a global scale, with about 2.0 MMT of excess capacity in 2015 
  • Demand is expected to see a negative growth of –0.5 to –1.5 percent (CAGR) until 2017–2018, post which, the lubricant market is anticipated to grow modestly from 0 to 0.75 percent until 2021, due to slower growth in the African and LATAM region and slow economic recovery in the European and North American countries