Global Market Outlook on Lubricants and Grease
- 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
Global Market Size–Lubricants
The global lubricant market reached $148 billion in 2016, and is projected to rise to $167 billion by 2021
Asia Pacific remains the largest market for lubricants. The Middle East and Africa have seen the fastest growth of lubricant demand
The increasing number of passenger and commercial vehicles and more disposable income in the developing economies will drive the Lubricant demand in the coming years
Global Industrial Lubricants
- The Global Industrial Lubricants Market is expected to grow with the CAGR of approximately 2.4% from 2017 to 2022
- Prominent trends that the market is witnessing include the evolution of bio-based lubricants, the improvement of low-viscosity lubricants to fit present machinery, demand for polyamide resins in industrial applications and growth opportunities/investment opportunities
- Hydraulic lubricants segment accounts for the largest share in the global industrial lubricants market mainly due to its low cost as compared to the other lubricants. Additionally, the growing demand of hydraulic lubricants from construction and mining industry, is also fueling the growth of the market.
- Hydraulic lubricants segment and metal working fluid segment is expected to grow at the fastest pace. The growth is mainly due to the rising demand for metals in the automotive industry.
- On the basis of End Users, global industrial lubricants market is segmented into automotive, manufacturing, heavy industries, power generation and others. Automotive sector dominates the end user segment of global industrial lubricants market mainly due to high demand for industrial lubricants form automotive sector.
- Power generation sector is also expected to be the fastest growing end use sector of the industrial lubricants market. Rising demand for energy across the globe ultimately fueling the demand of industrial lubricants in the power generation industry.
- Power plants require industrial lubricants that can provide superior performance, water resistance, with high corrosion inhibition. The use of industrial lubricants such as compressor oil, turbine oil, hydraulic oil grease and others in power generation industry, ensures the highest efficiency and operating reliability.
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
- On the capacity front, about ~2.3 MMT of capacity is expected to be added to the global Lubricant supply base by 2021
- Complete capacity addition of 2.3 MMT is expected to be based on the Group 2 and Group 3 base stock producing high performance lubricants
- Growing environmental regulations against emission have led to lubricant producers in the Middle East and Asia focusing on adding capacities at their plant locations in order to meet global demand. Many US refiners are upgrading to produce customized lubricants