Global analysis of the synthetic and bio-based lubricants market
The entire synthetic and bio-based lubricants market generated over USD 45 million in 2010 and industry research firms predict that the market volume will grow at an estimated CAGR of 2.2%-2.5% over the next 10 years. Individually, the demand for synthetic lubricant was 35.10 million tons in 2011 and will reach 41.52 million tons by 2018, recording a CAGR of 2.48% between 2013 and 2018. The market value for the same is estimated to reach USD 62,805.6 million in 2018. Demand for bio-based lubricants was 505.6 kilo tons in 2011 and will be 785.0 kilo tons in 2018 at a CAGR of 6.6%. Its market value is expected to reach USD 2,377.5 million by 2018.
Commercial and consumer automotive applications combined formed 61.4% of the industry share in 2011. Market trends suggest that the demand for synthetic lubricants from the consumer automotive applications segment will reach 11.86 million tons by 2018, at a compound annual growth rate of 2.58% between 2013 and 2018. Currently, industrial lubricants form the largest share in the synthetic lubricants market as far as application is concerned, accounting for an estimated 38.6% of the share in 2011.
Among bio-based lubricants, the automotive segment is the largest in terms of applications, and accounted for 25.7% of worldwide demand in 2011. In the same year, however, vegetable oil accounted for 87.5% of the overall bio-based lubricant demand. The hydraulic oil sector is estimated to record a 6.8% CAGR from 2013 to 2018, making it the fastest-growing segment.
The main players in the synthetic and bio-based lubricants market include Exxon Mobil, Royal Dutch Shell, Chevron, British Petroleum, Castrol, Total, and Fuchs.
Overview of synthetic and bio-based lubricants
A lubricant is a material that reduces friction between two moving surfaces, and can be divided into two primary types, synthetic and bio-based. Inherently, a lubricant should possess certain characteristics such as high viscosity index, low freezing point, high boiling point, thermal stability, high resistance to oxidation and corrosion prevention.
Synthetic lubricants can be mineral based or chemical based. Mineral-based lubes are products of petrochemicals manufactured from crude oil, while chemical-based lubes are synthesized externally using chemicals such as polyesters, polyolefin, polyglycols, polyesters, non-PAO synthetics, alkylated benzene and alkylated naphthalene. Synthetic lubricants are most commonly used in the automotive sector mainly because they are easier to procure and are relatively cheaper than bio-based lubricants.
Bio-based lubricants are derived from vegetable oils, are biodegradable and are not toxic when disposed in the environment. Owing to these features, this segment has gained preference over synthetic lubricants.
However, the prices of both are volatile and fluctuate due to price of raw materials.
With rising domestic consumption from the automotive and industrial sectors, Asia-Pacific has become the largest and fastest-growing market for synthetic lubes. The consumption of the region accounted for 37% of the overall synthetic and bio-based lubricants market and research reports forecast that the segment will grow at a CAGR of more than 3.5% in the coming years. North America follows next with 28% of the consumption, but the CAGR is expected to be a mere 1.3% owing to stagnancy of the market.
The global synthetic and bio-based lubricants market can be segmented on the basis of product type, applications, end user and geography.
On the basis of products, the synthetic lubricants market is divided into:
- Industrial: This consists of general industrial oils, process oils, industrial engine oils and metal working fluids.
- Commercial automotive: This includes hydraulic and transmission fluid, gear oil, grease and heavy-duty engine oil.
- Consumer automotive: This comprises automatic transmission fluid, gear oil, grease and passenger vehicle engine and motor oil.
On the basis of products, the bio-based lubricants market is segmented into vegetable and animal oils.
On the basis of application, the different types of oils under bio-based lubricants include hydraulic, demolding, automotive, turbine, chainsaw, industrial gear, compressor, metal working, process, and lubricating grease.
Bio-based lubricants can also be segmented on the basis of end user. These include industrial, consumer automotive and commercial transportation lubricants.
The entire bio-based and synthetic lubricants market can be geographically divided into North America, Europe, Asia-Pacific and Rest of the World.