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The Market Analysis of Lubricants
Theme:
Lubricants
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THE MARKET ANALYSIS OF LUBRICANTS
The industry dynamics are changing in terms of raw material, owing to the rising demand for bio-based lubricants. The growing trade of vehicles and their spare parts is anticipated to fuel the demand for automotive oils and greases. The major economic recovery in North America and Europe is expected to boost the consumer vehicles segment which is a boon for the market. Typically, lube manufacturers use crude oil, tight oil and other additives to formulate all types of lubricants. Moreover, many other manufacturers have definitive contracts with raw material manufacturers as well as suppliers. This strategically enables these companies to reduce uncertain time and price losses in the procurement of these materials. Lubricants are majorly used as diesel engine oils, gearbox & transmissions in passenger cars, commercial vehicles & motorcycle segments of the automotive sector. The growing automobile sales are expected to augment the global industry growth over the forecast period. The global automotive sales have been on the rise primarily driven by countries such India, China, US and Brazil. The growth drivers for the manufacturing sector in these markets include favorable foreign investment norms, availability of a large pool of skilled labor & technological know-how. The high growth in niche manufacturing sectors such as 3D printing and medical devices is expected to further complement the industrial growth in these markets. Hence, rapid industrialization in BRICS is expected to drive industrial fluids demand which is expected to complement the global lubricants sector growth. Major companies in the market are running a consumer-centric business which has led to a high
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level of innovations in terms of distribution timeline reductions and enhanced accessibility of the products. Many manufacturers have established ground-level distribution channels with regional suppliers that enable them to focus on other aspects of the business such as quality improvisation, product portfolio enhancement and more. Thereby leaving distribution handling to the dedicated sources with a broader reach and market knowledge. The industry is characterized by a high number of new market entrants that are seeking to tap the lucrative opportunities in the global market while existing players are entering into strategic collaborations to increase capacities & expand their reach into emerging markets. The joint venture, merger, and acquisition activities in the industry have increased significantly over the past decade. Companies constantly seek to establish long-term contract agreements with trusted partners for sustainable business operations globally. In terms of volume, the automotive segment dominated the market with a share of more than 57% in 2020. This high share is attributed to the increased sales of consumer automotive such as trucks, busses and other forms of passenger transport. The growth in the economy in emerging countries such as China, India and Brazil has led to the betterment of public transportation in these regions. This trend is expected to strengthen commercial automotive oil demand thereby supporting segment growth over the forecast years. The increasing industrial production in emerging markets of Asia Pacific and Latin America is anticipated to drive industrial oil products demand over the forecast period. Mining, Unconventional energy and chemicals industries are projected to be among the largest markets for industrial lubricants. This trend is expected to boost the demand for industrial lubricants in applications such as industrial engines, compressors, hydraulics, bearings and centrifuges. Marine Lubes are widely used in high-and
medium-speed engine oils and slow-speed marine engines. The product helps enhance the engine life and protects the components at high temperatures. some of the these products offer additive technology to provide protection against under-crowns and ring belt. Further, lubricants are used in slow-speed cylinders as they offer high-performance lubrication enhanced protection from mechanical wear and help mitigate cold corrosion.
The Current Indian Lubricant Market
India is the third largest lubricant consumer in the world after the United States and China in a slow growth industry. Automobiles and other transport dominated the market in 2018 owing to increasing production of vehicles in India. Hence, products like Engine oil dominated the market in 2018. The increasing automobile industry and industrial growth in the country are also expected to boost the demand for hydraulic fluids, during the forecast 2019-2024. Currently 41 MMT (million metric tonnes) of lubricants are produced globally. The market is expected to increase by 2% annually. Asia-Pacific is considered as the largest consumer of lubricants which shares about 14 MMT per year of which from Asia 4 MMT is shared by China and 2.4 MMT is shared by India. The automotive lubricant segment constitutes a large pie of the Indian lubricant market. It is projected that the automotive industry will only see growth at a CAGR of 3.9% by 2027. The demand for automotive lubricants has a direct correlation with on-road vehicle movement as well as growth of vehicle population and automobile sales. Automotive sales will be further fueled by the consumers preference for personal vehicles over public transportation in the post pandemic world. In 2021, India's automotive industry will see a 27% growth from this sector. The growing disposable income and spending power among the middle class and youth population have resulted in a high share of two-wheelers and four-wheelers in the total vehicle park. An untapped potential and under-penetration of vehicles in urban and rural areas present a huge growth potential for auto players. Improving infrastructure with well-connected roads and highways would further propel the demand for automobiles and the rural market will contribute a huge market share in the coming years. Adding to the market, the used car industry is huge and according to 'Indian Pre Owned Car Market Study', the used car market is set to touch 8.2 million units per year by FY25. This growing demand from the automobiles industry is driving the automotive lubricant demand in the country. By 2022, the government aims to construct 65,000 km of national highways at a cost of Rs. 5.35 lakh crore (US$ 741.51 billion). With the transformation of road infrastructure, more and more vehicles are expected to hit the road. However, the infrastructure lubricant market will also boost in the whole growth story. The government of India has planned to
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spend US$ 1.4 trillion in the next years in the infrastructure sector. Government's continued emphasis to drive India's Infrastructure sector will provide momentum to the Commercial Vehicle Sector. Beyond the increased need for lubricants in a commercial vehicle, there will be an increase in demand for industrial lubricants too. The need for gear oil, transmission fluid, metalworking fluid, and grease will see an upsurge in demand. The Indian industrial lubricant market will be worth USD 1.4 billion in 2020 and is further projected to reach USD 1.8 billion by the year 2027, growing at a CAGR of 3.8% during the forecast period (2021-27).
The Growth Drivers of the Lubricant Market
One of the key drivers supporting the lubricants market growth in India is the increasing demand from end-user industries. Lubricants are used in construction equipment because of their characteristics, such as anti-wear and resistance to corrosion. Hydraulic fluids made from lubricants are used in earthmoving equipment such as crawler excavators and mini excavators, owing to their high energy transmission capacity. They are also used to increase the drain/re-greasing intervals of the equipment, lubrication efficiency, and the wear resistance of friction pairs, as well as to enhance the lifespan of the equipment. They are used as hydraulic fluids, compressor oils, and others in the steel industry for various applications. Equipment such as blast furnaces, continuous castings, and others require lubricants to reduce downtime and increase operational efficiency. Such factors will drive market growth during the forecast period. The growth of the lubricants market in India is hampered by fluctuations in crude oil prices. The increasing prices of crude oil in India have adversely impacted the manufacturers and end-users . The fluctuations in crude oil prices cause volatility in raw material prices. Synthetic lubricants are primarily derived from hydrocarbons, which are derived from petroleum. Synthetic esters, PAOs, phosphate esters, glycols, and other silicate esters obtained from petroleum are a few other major sources of construction lubricants. Volatility in raw material prices can adversely affect the supply and profit margins of manufacturers. The increasing demand for cars and other
automobiles and steady use of lubricants in various processing industries for reducing mechanical friction are major factors driving market revenue growth. On top of that, the rising demand for high-performance engines in the automotive industry and rapid innovations in lubricants manufacturing processes are some other factors expected to contribute to revenue growth of the market between 2022 and 2030. Lubricants are adhering, solid, semi-solid or liquid hydrocarbon substances used for reducing friction between two colliding surfaces. This enables smooth operation of machines and protects them from frictional wearing and damage. It has extensive applications in processing industries, especially in unit operations that have moving components. The automotive industry is a major end-user of the substance where various forms of lubricants are used for reducing friction between surfaces. It also prevents corrosion of metal parts in contact by inhibiting oxidation, therefore minimizing repair time and requirements. The increasing demand for cars and other automobiles is a key factor driving revenue growth of the global lubricants market. The rising usage of lubricants can also be attributed to increasing adoption of bio-based oil lubricants by various end-use industries which have higher biodegradability than conventional lubricants prepared from fossil fuel distillates. The processing industries and automobile parts, especially engine lubricants, has increased over the years which is contributing to revenue growth of the market. Moreover, the increasing adoption of hybrid and electric vehicles, lasting limitations of grease lubricants and detrimental effects of lubricants on the environment are some major factors restraining revenue growth of the global lubricants market. Over the years, the adoption of electric vehicles has increased significantly which has decreased sales of engine oils and other lubricants. According to statistics from the International Energy Agency (IEA) sales of electric vehicles have doubled in 2021 with a total count of around 6.6 million and have accounted for 10% of global car sales. Further, the sale of electric vehicles has increased significantly in China accounting for 16% of the global electric car sales share, with over 3,300 car registrations in 2021. The use of grease as an industrial lubricant has several detrimental properties including limited lasting of grease on lubricating surfaces and limited cooling ability of the lubricant which is expected to decrease consumer preference to purchase grease. The contamination of lubricants through dirt, air particles and industrial scraps is a major cause of premature bearing failure. The presence of synthetic and mineral base oils decreases the biodegradability of lubricants which is expected to negatively affect plant, animal and aquatic life. This is another factor expected to hamper revenue growth of the market during the forecast period.
The segment of Synthetic oils accounted for significant revenue share in the global lubricants market in 2021
On the basis of type, the global lubricants market is segmented into synthetic oils, mineral oils and bio-based oils. The synthetic oils segment is expected to account for a significantly large revenue share during the forecast period. The lower vehicle emissions, compatibility with automotive hardware and lower cost are increasing demand for synthetic oils as base oils for manufacturing lubricants. Synthetic base oil lubricants also provide enhanced shear stability and chemical stability as well as better viscosity index which is some
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of the factors expected to increase demand for synthetic base oils for producing lubricants, contributing to revenue growth of the segment between 2022 and 2030.
The segment of Gear and engine oil accounted for largest revenue share in the global lubricant market in 2021
On the basis of application, the global lubricants market is segmented into industrial lubrication, gear and engine oil, brake fluids, greases, vacuum pumps and others. The gear and engine oil segment accounted for a significant revenue share in the global lubricants market in 2021. Gear oil is used for lubrication of gear systems and to prevent wear and tear of metal parts due to friction. Recurrently replacing gear oil maintains the longevity of vehicles and reduces corrosion of components and reduces repair costs. Similarly engine oils minimize friction between components of the engine which are in constant motion when a vehicle is switched on. Additionally, lubricants also maintain a lower temperature therefore protecting it against corrosion. Engine oils also prevent contamination and deposition of microbes in parts of the engine by carrying the suspension colonies to the oil filter which prevents deterioration of engine performance which is a major factor expected to support revenue growth of the segment during the forecast period. The industrial lubrication segment accounted for a moderate revenue share in 2021. The rising number of processing industries and increasing adoption of automated machines in pre-existing industries and manufacturing plants are key factors increasing demand for lubricants in the segment. Oils, greases, fluids and other lubricating substances are used in moving parts and motors of industrial unit operations. The rapid industrialization in high-income countries is expected to further increase demand for lubricants for industrial purposes over the coming years.
Automotive industry segment accounted for the largest revenue share in the global lubricants market in 2021
On the basis of end-use, the global lubricants market is segmented into automotive industry, aerospace industry, marine industry, energy industry, oil and gas industry, textile industry and others. The automotive industry segment accounted for a significant revenue share in 2021. The lubricants have a wide range of applications in cars and other vehicles such as brakes, engines, clutch and gear which is increasing their demand in the automotive industry. Engine oils, brake fluids, and gear oils reduce friction between colliding surfaces and prevent damage to automotive parts, which is increasing their adoption. The number of vehicle ownership has significantly increased in the Asia Pacific as well as Europe regions. Insights of the Asia Pacific Region
The lubricants market in Asia Pacific accounted for the largest revenue share in 2021. The increasing ownership of vehicles and rapid industrialization in countries in this region are major factors driving revenue growth of the lubricants market in Asia Pacific. The rising population and the latest advancement in automobile technologies have significantly boosted demand for vehicles, including cars, motorcycles and other modes of transport. in addition , the improvement of road infrastructure for transportation is another factor contributing to the rising demand. The North America lubricants market is projected to register a rapid growth rate from 2022-2030. The rapid developments in the aerospace industry and increases in the production of crude oil are contributing to revenue growth of the market in the region. The increase in supply of the crude oil is expected to provide more substrate for production of lubricants through distillation which will meet the increasing demand due to rapid urbanization and industrial projects in countries in this region. An increasing number of partnerships on the regional level is another factor expected to contribute to revenue growth of the North America Lubricants Market. The Europe Lubricants market is expected to account for a steady revenue growth rate over the forecast period. The increasing number of industrial acquisitions by major companies present in countries in the region as well as rapid developments in the automotive industry are some of the key factors driving revenue growth of the Europe lubricants market. The lubricants are extensively used in the automotive industry in the form of engine fuels, gear oils and brake fluids. The statistics from the International Council on Clean Transportation report suggest that new passenger cars accounted for around 86% of total new vehicle registrations in the EU in 2020 of which gasoline and diesel-based vehicles occupied the major share (45% and 39.3%, respectively). This is expected to increase demand for lubricants and consequently support revenue growth of the market over the coming years. CM
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MR. SANJAY AGARWAL
FILTREC was founded in 1991 in design and manufacturing of filtration products, a state of the art custom tailored production facility and a continuous benchmark activity vs main competitors keeps the manufacturing capabilities continuously updated at the highest level. Since its foundation, Knowledge and Know-how have been joined with Kindness , i.e. Knowledge of both market and products as well as experience and dedicated production capability, have never been separated from transparent and clear human relationships. R&D has a key role within the organization; supported by their fully equipped laboratory with all the test rigs required to meet the latest international specifications. The company belives in having depth conversation with their customers to keep alive the knowledge of the market developements and requirements. FILTRATION EFFICIENCY ... simply say FILTREC.
Q. Could you throw some light on the market-reach of Filtrec?
Filtrec S.p.A is a leading Hydraulic Filtration company having presence in global market & India from for 3 decades, providing Filtration solutions to hydraulic systems in association with various worlds reputed manufacturers. Filtrec S.p.A head quartered at Italy, having state of the art modern manufacturing facilities, R&D and design offices having 2 manufacturing facility in Italy and one in Tumkur Karnataka India, named as Filtrec Bharat Manufacturing Pvt. Ltd. We have warehouses, marketing and sales offices strategically located across globe. Our well-stocked inventory allows customers to order any parts and supplies are made in shortest possible time. This helps our customers to keep minimum inventory & there by increases bottom line
Q. What tests and projects has Filtrec undertaken successfully?
Filtrec offers the product variety of filter housing and expertise in designing and manufacturing filter elements. Customers can choose their requirements from our range of over 1,00,000 filter elements. We are the preferred suppliers for Construction / Mining / Steel & Aluminum / Equipment Manufacturers / Oil & Gas industries / Food & beverage/ Paper & Pulp, including leading Filter manufacturers across the globe.
Q. What are the new products showcased by Filtrec in recent years?
We have introduced a new range for all such as the high pressure, suction and return line filters. We offer replacement element which fits in filter housings made by leading manufacturers worldwide, i.e. they fit geometrically and exceeds performance of OEM’s We will also be commencing the in-house production for the components of the Filter elements such as the end caps, perforation tubes etc.
Q. What will be the industry's outlook for coming years?
The Hydraulic Industry in India is growing rapidly, and the Hydraulic equipment market is expected to grow at a CAGR of nearly 6.2% from 2020-2026. The expansion of aerospace, defence industry as well as new construction projects are offering an opportunity for market growth. Hence, the future of filters in India is quite promising and India has already become a manufacturing hub for filters, also reason being high import costs and duties.
Q. Which are the most significant projects in India that currently you are working on?
We will be introducing the Spin on filters range as well as commence the components production in India.
Q. Tell us about your offerings for the construction segment in India.
Today’s earth moving machinery require higher cleanliness standards, and demand higher filtration performance. Owners of vehicles and equipment desire solutions providing lower cost of operation and ownership. Filtrec offers a comprehensive line of filters and filter elements that include some of the industry’s most innovative solutions. We offer a variety of products such as the Air Filters Filler Breathers, Tank Top return Filters, In Line High Pressure Filters, spin on filters elements as well as interchangeable filter elements, accessories etc., for the construction segment so that can rely on our products to work in challenging environments where vehicle performance, efficiency and reliability is critically important.
Q. Where is Filtrec R & D centre and how do they work?
Filtrec is an ISO 9001:2001/ ISO 14001:2004 certified company for the development and manufacturing of Hydraulic & Process filters. We have a full-fledged R&D facility set up in Filtrec S.p.A, Italy. R&D plays a key role in our organization and is supported by a fully equipped lab with the test rigs required to meet the latest international specifications. The department is run by a team of experienced and enthusiastic engineers who are also active members of the ISO filtration committee. Its focus is developing and testing new ideas to always main a step ahead with out media and filter performance, allowing us to convert our customers’ requirements into innovative solutions. CM
