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Global Lubricant Additives Market - Outlook and Forecast 2022-2027
The lubricant additives market is projected to grow at a compound annual growth rate (CAGR) of 4.63% from 2022 to 2027, reaching a value of $13.2 billion by 2027, compared to $10 billion in 2021. Lubricant additives, including viscosity index improvers, dispersants, detergents, friction modifiers, corrosion inhibitors, and rust inhibitors, are essential components in the formulation of finished lubricant products and base oil. These additives play a crucial role in improving the performance of base oil and extending the lifespan of machines and engines.
The global demand for high-performance lubricant oil additives is driven by various factors, such as increased vehicle production, growing marine voyages, and the integration of advanced technology in industrial units. This demand can be categorized based on product types and application segments.
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USD 10 billion in 2020
Type, Application, and Geography
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Europe and North America are expected to experience significant demand for high-performance lubricant additives during the forecast period. This is primarily due to the rising adoption of 40 BN cylinder oil in marine equipment and the increasing demand for hybrid vehicles in these regions. Consequently, vendors operating in these regions have ample opportunities for growth.
In emerging economies like India, China, South Korea, and Brazil, the production and demand for vehicles have witnessed substantial growth. These countries have become manufacturing hubs for commercial and passenger vehicles, attracting foreign players due to factors such as low-cost labor, easy access to raw materials, and government support. In the automotive industry, lubricant additives are utilized in engine oil, gear oil, hydraulic fluid, and transmission fluid.
The demand for multifunctional lubricant additives is driven by advancements in engine design and consumer preference for high-performance products. Multifunctional additives offer various benefits in a single product, providing excellent anti-wear, extreme pressure, corrosion resistance, and antioxidant properties to automotive and industrial lubricants. Furthermore, they help companies save time and cost.
The main challenge faced by the lubricant additive industry is the volatility of crude oil prices. Crude oil serves as the primary raw material for producing lubricant additive feedstocks like ZDDP, para cresol, isobutylene, and polytetrafluoroethylene (PTFE). Any increase or fluctuation in crude oil prices directly impacts the cost of lubricant additives, posing a significant threat to vendor profit margins.
The market is segmented based on various factors, including type, application, and geography.
Segmentation by Type
Segmentation by Application
Segmentation by Geography
North America – US, Canada
Europe – Germany, France, UK, Italy, Russia, Rest of Europe
APAC – China, Japan, India, South Korea, Australia, Rest of APAC
Latin America – Brazil, Mexico, Argentina
Middle East & Africa – South Africa, Saudi Arabia, UAE, Rest of The Middle East & Africa
The most widely used lubricant additive in industrial and automotive oil is the dispersant. The majority, approximately 75%-80%, of its usage is found in heavy-duty diesel engine lubricants and gasoline engines. Dispersants serve the crucial purpose of preventing the accumulation of suspended particles, such as sludge, varnish, and dirt, in diesel engine oil. This helps to minimize damage to engine equipment.
In 2021, automotive lubricants held the largest share in the lubricant additives market, and they are expected to continue leading the market in the forecast period. This can be attributed to the increasing production of commercial vehicles, passenger vehicles, and two-wheelers worldwide. These vehicles not only require engine oil for lubrication but also rely on it to prevent the buildup of suspended particles on engine components.
The Asia-Pacific (APAC) region emerged as the third largest and fastest growing market for lubricant additives. China, India, and South Korea were at the forefront of this growth. In these countries, the demand for lubricant additives has surged in the automotive and transportation sectors, along with increasing mining activities and the manufacturing and machinery sector. This growth is driven by regulatory measures aimed at reducing carbon emissions. Furthermore, the implementation of manufacturing-friendly policies such as Vocal for Local and Make in India in India has provided domestic players with opportunities to expand their presence in the lubricating oil additives market.
The global lubricant additives market exhibits a fragmented nature, and this fragmentation is projected to intensify throughout the forecast period. The market consists of a substantial number of vendors, both on a global scale and domestically, operating across different geographical regions. The market is characterized by high entry barriers, as new entrants must possess advanced technical expertise to manufacture lubricant additives and ensure proper packaging. Furthermore, significant investments are required to establish production facilities and undergo extensive product testing in order to obtain the necessary licenses for market operation. Consequently, these factors contribute to the hesitation of new players in entering the market.
Key companies profiled in this report include BASF, Lanxess, The Lubrizol Corporation, Solvay, Chevron Oronite (Chevron Corporation), King Industries, Inc, DOUBLE BOND CHEMICAL. IND CO., LTD, Evonik, Chetas Biochem, Liqui Moly Gmbh, Ganesh Benzoplast, Shenyang Skychen Chemical Co., Ltd, Clariant, Croda International Plc.
Recent Industry Developments
In November 2020, Evonik expanded its oil additives performance lab, state-of-the-art laboratory facilities, and testing services throughout China. This new performance test lab is equipped with advanced testing equipment, including an FE8 bearing wear test, FZG efficiency test rig, mini traction, and the Denison HF-0 test rig. These capabilities allow the company to meet the growing technical demands of the lubricant industry by developing high-performance and fuel-efficient additives.
In November 2021, Evonik announced Brenntag Bulgaria EOOD as its new distributor partner for lubricant additives in Greece.
In October 2021, Evonik announced a partnership with Umongo Petroleum (PTY) Ltd to serve as its distributor for lubricant additives in South Africa. However, the distribution of lubricant additives by Umongo Petroleum (PTY) Ltd commenced in January 2022. This strategic collaboration enables Evonik to expand its range of lubricant additives across South Africa.
Key Questions Answered
WHAT IS THE SIZE OF THE GLOBAL LUBRICANT ADDITIVES MARKET?
The global lubricant additives market was valued at USD 10 billion in 2021 and is projected to reach USD 13.2 billion by 2027.
WHAT IS THE GROWTH RATE OF THE GLOBAL LUBRICANT ADDITIVES MARKET?
The global lubricant additives market is expected to grow at a compound annual growth rate (CAGR) of 4.63%.
WHO ARE THE KEY PLAYERS IN THE LUBRICANT ADDITIVES MARKET?
The key players in the lubricant additives market include BASF, Lanxess, The Lubrizol Corporation, Solvay, and Chevron Oronite (Chevron Corporation).
WHAT ARE THE DRIVING FACTORS FOR GROWTH IN THE GLOBAL LUBRICANT ADDITIVES MARKET?
The major growth factors in the market are the increasing demand for multifunctional additives and the rise in disposable income.
WHICH REGION IS EXPECTED TO DOMINATE THE GLOBAL LUBRICANT ADDITIVES MARKET?
North America is expected to hold the largest share in the market.