LUBRICATING OPPORTUNITIES!

Covid-19 has exposed many challenges for the lubricants industry by impacting both transportation and industrial sector. Major economies of each region are affected due to pandemic and resulted in slowdown in activities across the industries that use lubricants in their machineries and equipment. On the other hand, lockdown has impacted the transportation sector with very less movement of commercial and passenger vehicle and airlines grounded completely across the globe. The market is expected to recover in the coming months onwards with construction, industrial and transportation activities getting back on track and functioning with full capacities.

Driver: Increased demand for high performance engines leading the lubricant industry to evolve and grow

According to marketsandmarkets.com, since the first commercial car was developed by a company in the early 20th century, the design of internal combustion engines has evolved significantly. The internal elements of the engine are now exposed to much more tension and heat due to engine improvement. This also has led to very high RPM engines which require better quality engine oil. Apart from this, the transmission system inside a vehicle has also improved with vehicle reaching up to 150 miles per hour. The gear system and bearing technology have also improved. All these improvements and evolution necessitates better lubricants. This has led the lubricants to evolve and expand.

Restraint: Growth in demand of hybrid vehicles and increasing battery price parity

Hybrid vehicles contain both a small internal combustion engine (ICE) and an electric motor for optimum power utilization and reducing emissions from vehicles. ICE inside a vehicle needs lubricants, mostly engine oil, and transmission fluid. The growing number of hybrid vehicles will reduce the demand for lubricants per vehicle almost by half, as per industry experts. This factor, coupled with increasing battery parity, will reduce the volume of the global lubricants market. Batteries for electric vehicles are very costly; however, with improved technology, the cost is reducing, and driving range per charge is increasing. These factors have a huge impact on lubricant consumption. According to industry experts, in the current scenario, engine oil accounts for more than 40% of the total lubricants market.

Opportunity: Demand for renewable energy to positively impact the lubricants market

The power industry is a large consumer of industrial lubricants, ranging from turbine oil to transformer oil. Lubricants are used in various operations. The renewable energy industry is a prospective sub-segment of the power generation industry. Currently, wind power generation accounts for a very small share in the overall energy mix, but the sector is growing at a rate of 10% and has reached a capacity of 596,556 megawatts in 2018, as per world wind energy association. Wind turbines require lubricants for optimum operability.

Synthetic oil segment to witness the fastest growth during the forecast period.

Based on base oil, the global lubricant market is classified into mineral oil, synthetic oil, and bio-based oil. Mineral oil is the largest segment of the lubricants market due to its easy availability and low cost. However, the synthetic oil segment is expected to register the highest CAGR in the coming months, mainly due to its superior properties.

Construction equipment and lubricants…

Munish Nandwani, VP - Industrial & B2B, Total Oil India, said, “Lubricants are technology driven products. Equipment Technologies, OEM requirements, environmental norms, chemical regulations etc., drive lubricant development. The lubricant manufacturers need to continuously upgrade their product ranges as per technological evolution. Currently, we see a significant shift in the Indian market from mineral to synthetic-based products. The lubricant industry is moving towards low viscosity grades for better energy efficiency. There is a sharp rise in the demand for products with higher performance, and specifications. For example, the API CI-4 Plus, API CJ-4 or latest API CK-4 etc. BSVI compatible product range that is being introduced in the market. Oils with extended drain interval, biodegradability, compatibility with bio-fuels etc., are some of the other technological trends adopted by the lubricant manufacturers. Services such as analysis of oil-in-service are offered by lubricant manufactures to reduce the downtime of equipment.”  

Alok Sharman, Vice President, Commercial & Senior Director, Raj Petro, said, “Construction equipment requires synthetic or high group bases, polymer additives, bio-degradable products and formulation as per the design of the equipment. At Raj Petro, we continuously improvise products keeping with the industry requirements driven by extensive field trials. Range of high performance Onwo greases, Kyros gear oils and Zoomol Zenco range of transmission oils (greases &gear oils) authenticate our commitment. We also work towards creating value for our partners by reducing cost of ownership through technologically advanced products (Kyros hydraulic oils), total down time reduction (Kyros & Zoomol engine oils), future ready products like Kyros range zinc free hydraulic oil (ashless chemistry), plus fire-resistant hydraulic oils and products developed with least impact on the environment.”

Hits: 75