Global Market for Lubricating Oils and Greases
Lubricating oils and greases are omnipresent products that find widespread use in a wide range of applications spanning the length and breadth of myriad industries worldwide. Given that modern life crucially depends on fuel-driven machines and technology systems, market for lubricants and greases, which are defined as machine fluids that enable smooth functioning of machines, is forecast to continue to witness steady growth. Economic, regulatory, and political issues are rewriting the demand and supply dynamics of the worldwide lubricating oils and greases market. Though volume growth is forecast to be slower, modernization in manufacturing machinery and increase in motor vehicle fleet will call for superior quality lubricants. For instance, as the automotive industry continues to be overturned by issues pertaining to energy conservation, efficiency and emission regulations, consumer preferences are expected to shift towards lower viscosity grade, fuel-efficient oils. Also, high quality lubricants are long lasting and are capable of extending oil drain intervals, thereby reducing the overall lubricant need thus explaining the deceleration in volume growth. As a result, commodity lubricants will witness steady replacement by new generation lubricants and robust opportunities in dollar growth are forecast to continue into the foreseeable future.
The geography of the markets as well as the demographics of several regions, when coupled together, will keep the oils burning. While developed markets have moved into the maturity stage, developing markets project a bright future outlook for lubricants. Against a fiscal climate strained by deficit where consumers turn frugal, cost conscious, and demand cost-performance benefits, the clout exerted by developed countries as major lucrative importers is steadily weakening, pushing export oriented economies like China to depend heavily upon growth in domestic consumer spending. Also, with debt laden developed US and European economies slowing down, the strengthening of Asian currencies against the Dollar and Euro is straining Asian producers’ competitive advantage in the international market.
While recovering auto production, new vehicle sales, increasing vehicle population, increasing average operating life of vehicles, rise in the number of vehicle miles travelled, and increased focus and spending on maintenance are driving demand for automotive lubricants, increasing activity in the worldwide manufacturing industry is benefiting the market for industrial lubes including hydraulic fluids and process oils. With economic health now aligning with environmental health, the lubricants and greases market will witness a distinct focus among both, manufacturers and end-users on reducing the environmental footprint of lubricant consumption.
Technology development in the industry in the medium-to-long term will be driven by the concept of “sustainability” to minimize pollution and maximize resource utilization. In this regard, biolubricants with biodegradable properties will grow in demand and popularity. Biolubricants has been gaining in significance supported by research studies that indicate their ability to reduce emission of greenhouse gases by more than half, and also reduce two-thirds of energy consumption as compared to petroleum-derived lubricants. Coupled with the fact that 30% of conventional lubes accumulate in the environment as residual wastes, biolubricants are gradually replacing non-biodegradable fossil-based lubricants. Industrial applications of biolubricants are still in nascent stage with tremendous scope for expansion. Growth in biolubricants will be driven by stricter environmental regulations for conventional lubes, increased injection of funds into tapping the planet's natural assets for sustainable development and increased R&D efforts in innovating new formulation methods.
Innovation is also important as companies will need to keep pace with technology developments in the equipment/machinery industry. With efficiency and productivity being primary goals of the manufacturing and industrial sector, several industrial processes and associated equipment are currently being manufactured to allow for faster processing and thus are designed to operate at higher temperatures. This thereby requires lube manufacturers to manufacture more thermally, oxidatively stable and less volatile fluids for use in these machines. Also, stringent test protocols for assessing environmental acceptability of the fluids creates challenges for manufacturers to develop fluids that conform to legislated parameters pertaining to toxicity, biodegradability, bioaccumulation, lower emissions and recyclelability. In the auto industry, launching products targeting the new class of flexible fuel vehicles that run on ethanol and diesel, which features low sulphur content, 5-10% of biodiesel in the blend, represents a new window of opportunity. Lubricant manufacturers are also developing multifunctional lubricants, which are particularly preferred in the metalworking sector to suit various metals and working conditions.