Post-COVID-19 outlook on global general industrial oils and grease markets

David Tsui, Project Manager, Energy, Kline

COVID-19 has had a two-fold impact on the industrial market. Firstly it resulted in a global shutdown of non-essential businesses and secondly it led to a significant increase in working from home and people sheltering at home.

China was the first market to shutdown followed by Europe and North America. These shutdowns were staggered meaning that the effect on the market was pronounced, prolonged and they had a lasting effect.

The market for industrial oils makes up around nineteen percent of overall lubricant demand not including process oils. Over fifty percent of this market size is made up of hydraulic oils followed by gear, turbine oils and greases.

In terms of market size, Asia Pacific remains the largest sector with a share in excess of forty percent followed by Europe and then North America with twenty percent share each.

General manufacturing accounts for around fourteen percent of all industrial lubricant demand and the industrial market has grown steadily over the past few years peaking in 2019, whilst growing by around four to five percent a year.

In 2020, the market was originally forecast to grow but COVID-19 has changed, with the overall market size down around 13% in terms of volume compared with 2019 at around 6,431kt.

In terms of application, compressor and refrigeration 32 LUBE MAGAZINE NO.162 APRIL 2021

oils consume the most synthetic oils at close to around forty percent. Hydraulic oils account for around fifty percent of the category but these tend to be comprised of non-synthetic oils.

There is an overall shift in the industrial lubricants market from Group I to Group II as more premium products use a Group II base oil coupled with a more robust additive package to produce a better- performing and longer-lasting fluid.

Looking at specific industry demand for these types of lubricants, general manufacturing and primary metals account for around a quarter of general industrial oils (GIO) and grease demand. Hydraulic demand is the highest at around seventy-five percent, power generation lies at around ten percent which includes turbine and circulating, as well as gear oils.

Looking at the regions, Asia Pacific is the largest consumer of GIO oils and Greases at around forty percent of all demand. Whilst Europe and North America have the highest mix of premium and synthetic oils, compared with Asia Pacific and Africa.

South America and the Middle East which make up fifteen percent of all GIO and Grease demand, will continue growing during this year and next.

By brand, Shell continues to lead by market share and are leaders in many regions. ExxonMobil follows behind strengthened by an extensive product portfolio, then Chevron and BP which together make up the top four suppliers.

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