BASE OILS
The future of lubricants and lubricant base oils
H. Ernest Henderson, PhD, President, K&E Petroleum Consulting
To many, the lubricants industry represents a dichotomy with growth offset by decline. To others, it represents both a challenge and opportunity with the common theme that the overall performance continues to improve.
The global lubricants industry is in a state of recovery following the COVID 19 global pandemic of 2020. The rate of recovery has varied by region and country with some countries establishing a new “lower norm” in terms of lubricant demand.
Prior to COVID, global lubricant demand was estimated at 39.5 million MT in 2019 and had realised a marginal growth rate of 0.4% CAGR between 2014 and 2019. However, the global pandemic effectively shut down significant parts of the lubricants industry in 2020 and this continued into 2021 as economies staggered in their efforts to maintain stability and consistency. The result has been a global lubricant demand that reached 37.6 million MT in 2022 following an estimated decline of 14% between 2019 and 2020. This is shown in Figure 1.
and reduced emissions through the replacement of the internal combustion engine (ICE) with electric powered vehicles (EV) and hybrids. Global lubricant demand is projected to reach pre-COVID levels by 2024-2025, with some regions like Asia-Pacific achieving this goal as early as 2023.
Asia-Pacific represents the largest region for lubricant demand due to the strong performance from China and India that rank first and third in terms of country demand. The region also boasts 5 of the top 10 countries in terms of lubricant demand, including China (1st), India (3rd), Japan (5th), South Korea (8th), Indonesia (9th) based on 2020 estimates. The strong GDP forecasts for Asia-Pacific in general and for most of its country base will result in continued growth in lubricant demand in the future. This will come at the expense of developed regions like North America and Europe. A profile of lubricant demand by region is provided in Figure 2.
Figure 1: Lubricant Demand Share by Region - 2000 to 2022 Figure 1: Global Lubricant Demand
Recovery continues despite the major conflicts between Russia and Ukraine and most recently the Middle East, and the growing shift within the automotive industry towards improved fuel economy
22 LUBE MAGAZINE NO.179 FEBRUARY 2024
Lubricant demand can also be compared by the finished application. This would include automotive, industrial and process oil applications. Each of these categories can be further subdivided; Figure 3 provides an overview of pre-COVID global lubricant demand by application.
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