Lubricants and Greases
The report covers in detail the market supply demand dynamics, supplier landscape, pricing analysis and procurement best practices across the industries for Global Lubricants and Greases
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Agreement Between Parkland and Simpson Oil is AnnouncedMarch 27, 2023
New US Oil Refinery InvestmentApril 12, 2023
Base oil output in the United States has fallen once again in Q4 2022January 05, 2023
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Lubricants and Greases market report transcript
Global Market Outlook on Lubricants and Greases
In 2022, it is estimated 1.6 percent growth in the worldwide lubricant demand from the 36.6 MMT demand in 2021. Demand partially increased after decreasing in 2020 as a result of the epidemic
Lubricants are widely utilized in many processes, including compressor units in vehicle engines and manufacturing facilities, and their demand is rising regularly to keep working cycles moving. The demand is expected to improve in 2022, due to improved activity from the industrial and automotive sectors
China is the largest lubricant-producing region in the world, followed by the US. China and the US constitute around one-third of the global lubricant production market
Demand Market Outlook
Finished lubricant demand increased by 1.9 percent in 2022 compared to 2021 on a y-o-y basis, due to increased industrial activity in the automotive and industrial segments
Global Market Size–Lubricants
The global lubricant market is estimated to have reached $160 billion in 2022 and is projected to reach $165 billion by 2023. The first month of the year in the lubricant sector was smooth despite the unfortunate carryover of the many challenges from 2021 into 2022. On February 24th, Russia invaded Ukraine, further straining the already troubled global supply chain for base oils. Both WTI and Brent prices have exceeded $100 per barrel since Russia's invasion of Ukraine, and freight costs have sharply climbed as well. As a result, base oil prices increased once more and in reaction to these steps, the majority of blenders declared in March that they would adopt a second, up to 15%, price hike on finished lubricants that would go into effect in April.
The ongoing, grave shortage of lubricant additive supply is a crucial aspect to take into account in the context of lubricant price increases.
It is anticipated that lubricant demand will be moderate in 2023, which should lead to lower prices throughout the year, provided there won't be any unforeseen disasters.
Global Supply–Demand Analysis : Lubricants and Greases
The global estimated lubricant supply can be 37.5 MMT for 2023*. The market is currently oversupplied on a global scale, with about 0-1 per cent excess in 2023*. In 2023*, demand is estimated to increase to 37.40 million metric tons.
The independent lubricant makers performed better in first three quarter of 2022 than some major oil corporations in their capacity to provide the market with specific types and grades of PCMO and HDEO, despite the fact that both had a severe additive shortage
Russia–Ukraine war and the sanctions on Russia by Western nations are impacting the supply of base oil and lubricants negatively. The extremely serious shortage in lubricant additive supplies is another crucial aspect of the landscape of lubricant price increases to take into account.
Afton Chemical closed its lubricant additive plant in Sauget, Illinois as a result of the Midwest experiencing devastating flooding in July, which made the current scarcity of additives even worse. Even when the force majeure was lifted in mid-September, blenders were warned that Lubrizol still did not have unlimited production capacity or output.
Lubricant consumption increased in Q1 2022, due to high demand because of an energizing global economic growth but after Russia- Ukraine war started the distributors struggled to find finished products, logistics and prices, dealing with labor shortages, implementing six price hikes on lubricants. Notwithstanding low inventories, demand surprisingly dropped in the fourth quarter as well. Because prices were still high and there were economic concerns, it's possible that distributors and customers were wary of building inventory. Demand is expected to witness a recovery in 2023.
Industry Drivers and Constraints : Lubricants and Greases
The automotive sector is expected to remain a major demand driver
The automotive sector remains as the largest consumer of lubricant, accounting for around 57 percent of the overall consumption across the globe. With weak growth anticipated from the automobile sector globally, demand is expected to be lower
Demand from the industrial and food sector is expected to drive growth rates
Process lubricants and food grade lubricant is expected to drive the demand, followed by the manufacturing industry. Growth will be weaker due to the economic slow down
Specialty lubricants have the potential for high demand growth from many new applications
An emerging application area for specialty lubricants in process and special usage
Specialty lubricants offer higher margins, and the segment is expected to show the highest growth in the coming years
Substitutes market is growing steadily
Group I is threatened by Group II and III mainly because of regulations mandating clean fuel
70 percent of the re–refined oil is Group II which is threat to virgin Group II supply
Increase in synthetic oil usage is giving a threat to base oil Group III
Environmental regulations is hurting the business growth
Stringent rules and regulations govern the lubricant industry. New investment in technology and equipment to keep abreast of the industry standards would restrict entry of new players
Increasing customer preference towards high performance lubricants
The conventional mineral oil-based lubricant is under steady decline and as most of the old blending plants were based on mineral oil base stock, we expect to see closures or conversions of these refineries
Sanctions in Russia is expected to affect the export of base oil and supply of lubricants in Russia. Demand in Russia could also decrease due to a depression in economy
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