Industrialization Opens up New Avenues for Global Lubricants Market

The global lubricants market is estimated to grow at a CAGR of 1.72% from 2014 to 2020. The market’s volume in 2013 was 39,140.12 kilo tons. By the end of 2020, the global lubricants market should total reach a volume of 44,165.11 kilo tons. The greatest reason for this growth is the rapid rate of industrialization in most emerging economies of the world. But things are not as simple as they seem for the global lubricants market. A faster rate of development also implies the substitution or elimination of conventional lubricants. Major players in the market are therefore attempting strategies to sustain themselves against the restrictions and use the new technology wave to come up with new, eco-friendly products.

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The global lubricants market has so far been dominated by the mineral oil segment in terms of products. The segment singled itself out in the market with a whopping 80% share in 2013. The segment is, however, witnessing quite a bit of opposition due to the environmental impact it has had. In direct contrast to this situation is the biobased lubricants segment, which is expected to be the fastest growing one in the global lubricants market.

Love-hate Between the Markets for Lubricants and Automobiles

It is logical to think that the global automotive market is one of the largest consumers of lubricants. By volume, the automotive market, as a lubricants consumer, took up 50% of the market. Lubricants are needed by vehicles for as long as they are in use. Now that the automobile market is booming, we can see its direct relation to demand from the global lubricants market. But this demand does not come without caveats. At the top of the long list of lubricant requirements for today’s vehicles is for them to be environmentally safe. Manufacturers are struggling to essentially let go of the conventional methods that, although efficient, have caused much harm to the ecosystem.

At the same time, we have the fast-growing segments of electric and hybrid vehicles. Vehicles are already showing a much larger timeframe between oil changes. Adding hybrids to that mix reduces the demand for lubricants even further. The global lubricants market is no longer needed by the entire automobile industry, leaving all but the top players to need to innovate to stay in existence.

Are Oil Prices Affecting the Global Lubricants Market?

A recent move by Royal Dutch Shell PLC shows that the falling oil prices could be working against the global lubricants market. In an attempt to shed assets and recover losses, Shell has sold off its Chinese lubricants business’ majority stake to Carlyle Group LP. This has given the private-equity firm a very rare chance to enter the China energy industry. Shell, on the other hand, said they are going to focus on selling their own lubricants brands inside China.

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Two nations that are showing a remarkable rate of growth are India and China. Both nations are showing improvements in GDP. The expansion of all industries in these two nations, especially automotive, are set to light up the future of the global lubricants market.