Industrial Lubricants Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Industrial Lubricants Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Global Industrial Lubricants Market was valued at 20,063.03 million liters in 2021 and is expected to grow with a CAGR of 2.84% during the forecast period (2022-2027).

The market is negatively impacted by COVID-19 in 2020. Considering the pandemic scenario, the activities in various end-user sectors, including, metallurgy and metalworking, chemical manufacturing, and others, were temporarily stopped during the pandemic, due to government-imposed lockdown, in order to curb the spread of new COVID-19 cases, thereby, had negatively impacted the industrial lubricants market for a short period of time. However, COVID-19 has affected the automation process in industrial activities on a large scale in a positive way. The limited availability of manpower due to the pandemic, need to keep a safe distance in working places, and use of various personal protective equipment have accelerated the adoption of automation throughout the industries. Moreover, the increase in productivity has also increased the run time of the machinery and the speed of the equipment, which has increased the importance of adequate lubrication on the load-bearing surfaces of the equipment, thus enhanced the demand for studied market. For instance, as per World Trade Organization (WTO), Chinese exports of products critical to combating COVID-19 surged from USD 38 billion in 2019 to USD 105 billion in 2020.

Key Highlights

• Over the short term, increasing demand from the wind energy sector is expected to drive the market's growth.
• On the flipside, detrimental effects of lubricants on environment is likely to hinder the growth of the studied market.
• Growing prominence of bio-lubricants and development of low viscosity lubricants are likley to act as opportunities for the studied market.

Key Market TrendsHeavy Equipment Segment Dominated the Market

• Heavy equipment lubricants find their applications in sectors, such as construction, mining, and agriculture.
• In the construction sector, lubricants prevent premature failure and decline in the performance of construction equipment, which is subjected to extremely harsh operating conditions that involve heat, dirt, and moisture. Lubricants perform various functions, in order to safeguard construction equipment from bearing failures, the short lifespan of engine oil, lower resistance of diesel fuel to water, rusting of cables, ropes, and draglines.
• The construction sector has been witnessing robust growth in the Asia-Pacific and Middle Eastern countries over the past few years. The Asia-Pacific and the Middle East and African countries are receiving huge domestic, as well as foreign investments, for setting up industrial units, hospitals, malls, the hospitality industry, and the IT sector.
• Asia-Pacific is an attractive market for foreign companies, due to the healthy economic performance of the countries, like India, China, Indonesia, and others, and the efforts made by the Middle Eastern countries to develop their tourism and other non-oil sectors are driving commercial construction activities in these regions.
• China began a construction boom in October 2021, as fiscal stimulus increased and the issuance of special bonds increased, providing support for the country's fixed-asset investment, which has remained relatively flat, in order to buffer against rising headwinds in the fourth quarter and deliver stable and sound GDP growth for the entire year. Several Chinese provinces have recently announced large infrastructure projects towards the end of 2021. In November 2021 , the Guangxi Zhuang Autonomous Region in South China presented a series of large construction projects for a total of USD 29.15 billion. Meanwhile, Hubei Province in Central China recently held a launch ceremony for the fourth quarter, which included 805 projects worth 452 billion yuan.
• The Indian government has been actively boosting housing construction, as it aims to provide home to about 1.3 billion people. The country is likely to witness around USD 1.3 trillion of investment in housing over the next seven years and is likely to witness construction of 60 million new homes in the country.
• The construction industry in Europe is recovering faster than expected, with most of the losses from the pandemic expected to be recovered by 2021. As per the Euroconstruct, the European construction volume is expected to expand by 3.8 % in 2021, following a 5.1 % decline in 2020. The fall in 2020 was smaller than predicted in comparison to prior estimates, and the pre-crisis level will thus be reached by 2022 at the earliest. Construction, unlike in previous years, is expected to increase at a slower rate than the entire economy starting in 2022: growth rates of 3% and 2.1 % are expected in 2022 and 2023, respectively.
• The equipment used in mining activities are heavy-duty and operate under high pressure and temperature. So, components, such as ropes, bearings, bushes, pins, and gears, in mining equipment, are likely to be subjected to friction, wear, and corrosion. Regular lubrication of the equipment is required for continuous and efficient mining activity. Some of the commonly used lubricants in the mining industry include heavy-duty diesel engine oils, gear and transmission oils, and hydraulic fluids.
• About 70% of all the mining production, as well as consumption, is concentrated among the Asia-Pacific Economic Cooperation (APEC) member countries. Bauxite, copper, iron, nickel, silver, and zinc are some of the major ores that are mined. The APEC members account for around 75% of the global mining trade and investments. Despite the steady growth in the requirement for heavy equipment lubricants witnessed in the past few years, the demand for these lubricants has witnessed a decline in 2020. This can be attributed to the lockdowns set in place across the world to curb the pandemic outbreak, the decline in public and private spending, and project delays being witnessed in the heavy equipment sector.
• The Asia-Pacific region dominates the global agricultural sector, owing to the growing production from countries, like China and India. The growing investments in agriculture sector to reduce manual work and increase the use of various machinery to reduce time and improve efficiency are expected to drive the market studied.
• Hence, all such factors and trends in are expected to drive the demand for heavy equipment and technologies used, further driving the demand for lubricants, post the global economic recovery from the pandemic.

China to Dominate the Demand in Asia-Pacific Region

• China is the largest consumer of lubricants and greases in the current scenario. The vast manufacturing activities pertaining to different sectors and the rapid growth in the industrial and automotive sectors have pushed the country to stand among the major lubricant consumers and producers in the global landscape.
• Transportation equipment production and steel processing are the major consumers of industrial lubricants in the country. The production of off-highway equipment has witnessed a downfall at the beginning of 2020, due to the COVID-19 pandemic and the brief shutdown of many factories in the country. Since the beginning of the year 2021, the business has been flourishing for Chinese excavator manufacturers, propelled by rising market demand and signs of economic recovery both at home and abroad. According to data from the China Construction Machinery Association, 26 of China's main excavator manufacturers sold a total of 126,941 digging machines in the first quarter of 2021, up by 85% year-on-year (Y-o-Y). In the next three quarters of 2021, the rapid pace of construction activities demonstrated strong demand for construction machines and macroeconomic vitality. Infrastructure expansion is likely to pick up in the coming years, bolstering the economy's healthy recovery.
• In the coming years, strong economic recovery of equipment and machinery production in both the international and domestic markets is expected to become an important driving force for lubricant products.
• The government’s focus toward enhancing the domestic manufacturing sector has been leading to an increase in the adoption of high-end equipment, primarily in the fields of infrastructure development, aerospace and marine engineering.
• China hosts a vast construction sector. The developments in the commercial and residential sectors in the past two years have supported the construction sector's growth at large.
• China has been majorly driven by the ample developments in the residential and commercial construction sectors supported by the growing economy. In China, the housing authorities of Hong Kong launched several measures to push-start the construction of low-cost housing. The officials aim to provide 301,000 public housing units in 10 years till 2030.
• In the first half of 2021, China's provincial governments approved the construction of 24 new coal power projects, adding a total capacity of 5.2 gigawatts (GW). Three large-scale coal-fired power plants were approved from key project lists, which provincial governments use to apply for financial support and priority status from the central government.
• Downtrends have been observed in the agriculture and automotive machinery sector, with negative effects being witnessed in terms of investment, and trade, primarily from small and medium scale sectors in 2020.
• China is the world's largest automotive producer. However, in 2019, the country witnessed a 7.5% decline in vehicles production, accounting for 25.72 million units of motor vehicles. The automotive industry's performance was affected by economic shifts, China's trade war with the United States and COVID-19 lockdown in later phase of 2019. This trend sustained during 2020 as well, as the domestic automotive production declined by 2%
• The China Association of Automobile Manufacturers (CAAM) reported cumulative motor vehicle production levels for 2021, which were 26.082 million units, up 3.4% Y-o-Y. CAAM predicts the motor vehicle market will continue to record steady growth in 2022 and beyond.
• China's crude steel output declined by 3% Y-o-Y to 1.03 billion tons in 2021, according to statistics issued by the National Bureau of Statistics (NBS), marking the first year-on-year decline since 2016. According to NBS data, the country's pig iron output declined 4.3% Y-o-Y to 868.57 million tons in 2021, the first Y-o-Y decline in six years. The primary reason for the decline was the slashing of production rates caused by power shortages in the country.
• Therefore, all the aforementioned factors are likley to significantly impact the demand for the studied market, in the country, through the years to come.

Competitive Landscape

The global industrial lubricants market is fragmented in nature. Some of the key players in the market include Royal Dutch Shell PLC, Exxon Mobil Corporation, China Petroleum & Chemical Corporation, China National Petroleum Corporation, and BP PLC (Castrol), among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Amsoil Inc.
Bharat Petroleum Corporation Limited
Blaser Swisslube AG
BP PLC (Castrol)
Carl Bechem GmbH
Chevron Corporation
China National Petroleum Corporation (PetroChina)
China Petroleum & Chemical Corporation (SINOPEC Group)
Eni SpA
Exxon Mobil Corporation
FUCHS
Gazprom Neft PJSC
Gulf Oil International
HPCL
Idemitsu Kosan Co. Ltd
Indian Oil Corporation Ltd
ITW (ROCOL)
ENEOS
Kluber Lubrication
Lukoil Lubricants Company
PT Pertamina
Petrobras
Petronas Lubricants International
Phillips 66 Lubricants
Repsol
Royal Dutch Shell PLC
Tide Water Oil Co. (India) Ltd
TotalEnergies
Valvoline Inc.