Lubricant Additives Market Overview
Lubricant Additive Market size is estimated to reach US$22.3billion by 2027 after growing at a CAGR of 3.2% during the forecast period 2022 – 2027. Lubricant additives are the chemical compounds that when are dissolved or suspended as solids in oils, enhance oil’s functioning by forming an oil film that converts solid friction into liquid friction which prevents heating and abrasion of metal parts. Different types of additives have different functions like anti-wear additives and corrosion inhibitors enhance existing base oil properties, viscosity index improvers suppress undesirable base oil properties, dispersants additives impart new properties to base oil like neutralizing acid formed in the oil. The growing automotive industry, technological changes in modern engines, and growing efforts of nations towards fuel economy are acting as drivers for the lubricant additives market. However, lubricants are emitted into the environment as oil mist and micro drops, which creates a negative impact on the environment. Hence such negative impacted the shift from fuel combustion vehicle to electric vehicle that uses less lubricant, which is expected to hamper the growth of the lubricant additive industry in the coming years.
COVID-19 pandemic had negatively impacted the lubricant additives market on a global level, as due to restrictions and lockdown imposed by governments all across the globe, the productivity went down of various manufacturing sectors like metalworking, fabricating oil & gas, chemicals, consumer goods, etc. But the automobile sector was majorly hit, as there was shutting down of large part of the auto industry and its many suppliers around the world. Hence due to this, vehicle usage, as well as vehicle sales, took a downfall. And as lubricants additives are used mainly in heavy-duty and passenger vehicle lubricants, so with the decline in vehicle production the demand for lubricant additives especially the passenger vehicle lubricant in the automotive segment also declined. As per the International Organization of Motor Vehicle Manufacturing, in 2020 there was a 16% global decline in vehicles production i.e., less than 78 million vehicles, with all major producing regions like the U.S, Brazil, Germany having a sharp decline of 11% to 44% and Europe saw a drop of 21% on average.
The report: “Lubricant Additive Market – Forecast (2022 – 2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the Lubricant Additive Industry.
- Bio-lubricants are becoming a suitable replacement for petroleum-based lubricants as they provide better lubricity, high flashpoint, high viscosity index. And as bio-based lubricants are derived from bio-based raw material, so they are environmentally friendly.
- Asia-Pacific region dominates the lubricant additive market, industrial and automotive sector in countries like China, India, Japan is rapidly advancing. The region has become a global manufacturing and commercial hub where several major companies are planning to invest to expand their global image
- The development of new and efficient lubricating technology like Matched Molecular Chemistry, which is more efficient, requires less maintenance and water cooling for industrial application has created significant growth opportunities for the lubricant additive industry
Figure: Asia-Pacific Lubricant Additive Market Revenue, 2021-2027
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Lubricant Additive Market Segment Analysis – By Product Type
Engine oil held the largest share in the lubricant additive market in 2021, with a share of over 30%. As it helps to preserve engine performance, reduce wear and tear of machinery, provide prolonged life to it with consistent use, therefore it is used for all different kinds of machinery and engines. They are also used in heavy industrial equipment such as automobiles or construction equipment. For instance, as per the State Council for the People’s Republic of China, in July 2021 China has approved projects related to the development of affordable rental homes for better access to housing in China’s big cities. In 2019 National Development and Reform Commission of China approved 26 infrastructure projects estimated to be completed by 2023. Hence such demand for affordable housing and an increase in infrastructure projects will drive construction in the country, due to which demand for engine oil used in heavy equipment like cranes and scrapers used in the construction sector will also increase.
Lubricant Additives Market Segment Analysis – By Additive Type
Viscosity index improvers held the largest share in the lubricant additives market in 2021, with a share of over 35%. Viscosity improver is majorly used to enhance the performance of the engine as it improves the performance of lubricant at high and low temperatures. As they are made of a polymeric molecule, so they are sensitive to changes in temperature i.e., the molecular chain contracts at low temperature and relax at high temperature. The automotive industry is the main user of this additive. As per the U.S Bureau of Economic analysis in 2021, motor vehicle production in the U.S increased up to 16% with truck output showing maximum volume. As per the European Association of Motorcycle Manufacturers, in European markets like France, Germany, Italy, Spain the two-wheeler production and registration rose by 10.6% in 2021 from last year. As the production of two-wheeler and motor vehicles are increasing in the automotive sector in these regions, so demand for viscosity index improvers which is used in various automobile oils like engine oil, gear oil, hydraulic oil, transmission oil, etc. will also increase.
Lubricant Additive Market Segment Analysis – By Application
Heavy-Duty Engine held the largest share in the lubricant additive market in 2021, with a share of around 40%. The lubricant for the heavy-duty engine is mainly used in heavy and off-road equipment like diesel trucks, bulldozers, Graders, etc. And it provides certain benefits like enhancing fuel economy, increase in engine life, minimizing downtime for equipment and vehicle, etc. As the equipment is used mainly in construction projects so their selection depends upon the work and economy of the project. For instance, as per October reports of Infrastructure Australia 2021, the major infrastructure activity relating to commercial buildings, civil infrastructure, and residential will double in the next three years. Hence, with the increase in such construction projects the demand for lubricants used in heavy-duty equipment like a bulldozer, excavators will also increase.
Lubricant Additive Market Segment Analysis – By End User
The automotive segment held the largest share in the lubricant additive market in 2021, with a share of over 45%. Lubricant additives are used in an automobile to clean, cool, prevent metal parts from corrosion and rust. Lubricants like engine oil are used to enhance fuel efficiency and performance of the engine in automobiles and gear oil is used in automobile gearbox to protect gear parts from high mechanical pressure. Hence with the rapid development in the automotive sector and increase in production of vehicles in major regions, the demand for gear and engine oil will also increase as it has high applicability in the automotive sector. For instance, as per the International Organization of Motor Vehicle Manufacturing, the global production volume of vehicles increased to 57 million in 2021 from 52 million in 2020, with Asia accounting for 50% of production. As per European Automobile Manufacturers Association, the production and registration of passenger cars in the EU increased by 53.4% in 2021 with strong volume seen in Spain, France, Germany where mostly manual cars are used in Europe.
Lubricant Additive Market Segment Analysis – By Geography
Asia-Pacific held the largest share in the lubricant additives market in 2021, with a share of over 35%. It is due to factors such as rising economies and an increase in investments in various industrial sectors. As per the Indian Brand and Equity Foundation, the automobile sector in India attracted FDI worth US$30.51 billion between April 2000 and June 2021. As per the 2021 report of the European Automobile Manufacturers Association on global vehicle production, China produces 32% of 74 million cars manufactured worldwide followed by Europe 23%, Japan & Korea 16%. And as per China Electronic Information Industry Development, the country is expected to spend US$1.4 trillion on new infrastructure projects between 2020-2025, including investments in renewable energy and residential buildings. Hence as the construction and automobile sector in China and India and the automobile sector in Japan & Korea are rapidly developing, so this has led to an increase in demand for advanced lubrication in these sectors in the Asia Pacific region.
Lubricant Additive Market Drivers
Changes in Automobile Engines Technology
Modern engines in terms of reliability and efficiency depend directly on the effectiveness of the lubricating system. lubrication is responsible for cooling internal parts of the engine which are acting relative to each other creating friction and heat which results in overheating. With the advancement in passenger car engine technology like Gasoline Direct Injection & Turbocharge Gasoline Direct Injection, there have been some advancements in lubricant standards too. For instance, In North America, The International Lubricant Standardization and Approval Committee in 2020 has implemented ILSAC GF-6 standard which allows improvement in fuel economy, emission system protection, engine oil robustness. Hence such implementation will increase demand for lower viscosity index improvers lubricants as they are used in all vehicles and efficiently reduce engine friction.
Nations effort for Achieving Fuel economy
For improving vehicle efficiency and transition to low carbon vehicles, various initiative has been launched in nations globally focusing on all automobile sectors like light-duty vehicles, heavy-duty vehicles, buses, motorcycles, trucks, etc. For instance, the Global Fuel Economy Initiative launched by United Nations in 70 countries in 2019 aims to improve vehicle fuel economy and accelerate progress on decarbonizing road transport by 2030. Hence such initiative will increase the demand for efficient lubricants like bio-based and nanotube-based lubricants that can be used in new vehicles to achieve low engine friction and fuel economy.
Lubricant Additive Market Challenge
Growing demand for E-Vehicles
Due to rising environmental concerns and growing technological advancements consumers have started shifting their demand from fuel combustion vehicles to electric hybrid vehicles. Various automotive plants for e-vehicles are being set up in countries. For instance, as per European Automobile Manufacturing Association, the production for e-vehicles increased up to 11% in 2020 from 3% in 2019 in the EU, and as per the International Energy Agency, electric car registration increased by 41% in 2020 globally, with China and Europe being the largest electric vehicle market. And as per International Council for Clean Transportation report 2021, various motor companies like Xpeng Motors, Nio, Volvo have set up large e-vehicle factories in central and south-eastern China. Hence such an increase in demand and production of e-vehicles can ban petrol and diesel vehicles which are the main consumers of lubricant, thereby negatively impacting the lubricant additive industry.
Lubricant Additive Industry Outlook
The companies to develop a strong regional presence and strengthen their market position, continuously engage in mergers and acquisitions. Some of the major players in this market are as follows:
1. Afton Chemical Corporation
2. Azko Nobel
3. Shell International B.V
4. China National Petroleum Corporation
5. Chevron Corporation
6. Evonik Industries
7. Lubrizol Corporation
8. Chevron Oronite
9. Exxon Mobil Corporation
10. Valvoline Inc.
- In 2021, Valvoline Inc. signed a definitive agreement with Kent Lubrication Centre Ltd. to purchase its quick lube centers which will be rebranded as Valvoline Instant Oil Changes (VIOC) service centers. Hence such acquisition would help the company to expand its service center network in Texas
- In December 2021, Gear Hugger LLC launched its new lubricant product Gear Hugger ECO, which is non-toxic, plant-based, and contains biodegradable ingredients. The product will protect machines from rust and corrosion and without leaving any harmful residual behind.
Report Code – CMR 78530
Report Code – CMR 0047
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