INDUSTRIAL LUBRICANTS
Industrial lubricants in a transitioning global economy
Pooja Sharma, Project Manager, Energy Practice, Kline & Company
The steady global economy during the past couple of years has resulted in accelerated industrial growth in 2024; a shift from the 2022 and 2023 lows. The recovery, though positive, remained unsteady, with first half of the year seeing growth followed by a slowdown for most of the balance months, the result of challenging business conditions and higher interest rates. The year 2024, however, ended in growth, indicating recovery. The start of 2025 has been positive and could be the year that carries the baton forward for continued growth according to experts who believe that the global economic growth trajectory could possibly merge into the pre-COVID industrial growth forecast in the long-term.
Global medium-term growth forecast released by the International Monetary Fund indicates slower than previously estimated global growth, suggesting an imminent divergence in sectorial growth across different economies. For example, the United States is poised for an upside growth ushered by the favourable policy environment and strong governmental initiatives such as “Make in America”, new trade policies, and fiscal stimulus. On the other hand, China is likely to see a downside in sectors underpinned by real estate and European countries are likely to see downside in the energy and related sectors due to headwinds from the ongoing energy- mix adjustments.
Bearing in mind such market dynamics, the suppliers of industrial lubricants must refine their strategies, to stay competitive. These strategies must capture the key growth markets and sectors, as well as
embrace the developments taking place on the higher industrial plane towards, for example digitalisation and changing energy-mix. For instance, the growth in general manufacturing sector, including automotive and equipment / machinery manufacturing, will be driven by the growth in Asian countries such as China, India, Indonesia, and Malaysia. Government initiatives in these countries, such as India’s “Made in India”, Indonesia’s “Making Indonesia 4.0” and Malaysia’s “Industry4WRD” are fueling growth and digitalisation of the manufacturing sector in these countries. The anticipated growth in demand for industrial lubricants, such as metalworking fluids, hydraulic oils, and gear oils, from the general manufacturing activities in these markets make them highly lucrative for lubricant suppliers.
The general manufacturing sector in North America is rebounding from the lows of 2022 and 2023, and is entering the world of digital transformation. The recent presidential election in the United States brings promises of bullish growth for the industrial segment driven by the positive spillovers of fiscal stimulus, trade policies, and corporate tax cuts. Enhancements such as “Made in America,” trade taxes, Inflammation Reduction Act, and CHIPS and Science Act, have collectively positioned the US manufacturing sector for a robust recovery and sustained growth. The growth will further be enhanced by efficiency and productivity gains resulting from increased adoption of automation, artificial intelligence, and smart manufacturing systems. All of these developments not only point towards volumetric growth in demand for industrial fluids but also predict growth in premium lubricating fluids that facilitate predictive maintenance Continued on page 24
LUBE MAGAZINE NO.186 APRIL 2025 23
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