Lubricants Market Trends

Growth Drivers

• Expanding food & beverage industry - As the food & beverage industry expands, there is a greater demand for machinery such as conveyor belts, mixers, packaging equipment, and processing machines. These require lubrication to operate efficiently and maintain uninterrupted production. It is anticipated that the global food & beverage industry will expand by around 12% by 2027. Additionally, there is a high need for food-grade lubricants to ensure compliance with stringent safety and regulatory requirements set by food and safety organizations, prevent contamination, and maintain product quality.
• Increasing spending in construction - Construction activities such as building infrastructure, residential complexes, and commercial spaces involve heavy machinery and equipment that depends on lubricants for smooth operation and maintenance. Therefore, as construction expenditure rises, there is a corresponding surge in the demand for lubricants to maintain the optimal efficiency and longevity of the machinery. In 2023, the US construction sector was valued at about USD 2 trillion. By 2027, the total value of construction projects in the United States, including residential, non-residential, and non-building categories, is expected to exceed USD 2.2 trillion.
• Flourishing marine sector - The rise in global marine trade increases maritime transportation, leading to an increased market demand in marine. Ships and vessels in the marine industry depend on lubricants to maintain the efficiency and longevity of their engines and other machinery. The need for high-performance lubricants is further fueled by stringent environmental regulations. Additionally, leading marine companies are collaborating to set strategies into place that will reduce shipping emissions. For instance, in 2023, Mitsui O.S.K. Lines, Ltd. and Shell Marine Products Singapore, a business division of Shell Eastern Trading Pte. Ltd. (Shell), signed a Memorandum of Understanding (MoU), pledging to work together towards the advancement of alternative maritime solutions and the holistic management of carbon emissions liabilities.

Challenges

• Stringent environmental regulations - Increasingly stringent regulations regarding emissions and environmental impact are pushing lubricant manufacturers to develop more eco-friendly products. This can increase costs, restraining market growth.
• Volatility in the prices of base oils - The lubricants market is restrained by the volatile price of the raw materials required to manufacture industrial lubricants. Mineral and synthetic-based base oils are predominantly derived from crude oil and the constant fluctuation in crude oil prices acts as a barrier to market expansion.