The global synthetic lubricants market size was valued at USD 17.2 billion in 2022. It is estimated to reach USD 22.9 billion by 2031, growing at a CAGR of 3.28% during the forecast period (2023–2031). The utilization of a synthetic lubricant exhibits improved oxidation resistance, hence facilitating an extended lifespan of the product, longer intervals between drainages, and the maintenance of appropriate electrical properties throughout the lubricant's operational duration. This has contributed to the market expansion.
A synthetic lubricant is a chemical compound that reduces or regulates friction between two industrial surfaces. It is made with synthetic base oils and chemically modified substances, such as esters, polyalthaolefin (PAO), and polyethylene glycols (PAGs), and has properties similar to those of petroleum-based products. Transmission, hydraulic, compressor oils, transmission, refrigeration, and turbine oils are all examples of synthetic lubricants that may be found in stores.
The lubricant absorbs the heat emitted by the mechanical components and reduces the temperature of the moving elements, thereby increasing the equipment's overall service life. Synthetic lubricants have several advantages, including low energy consumption, volatility, high thermal and oxidative stability, and flash points. Thus, they have various applications in construction, mining, food processing, oil and gas, textile, chemical, and automotive industries.
|Market Size||USD 22.9 billion by 2031|
|Fastest Growing Market||North America|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
The COVID-19 epidemic caused a decline in production and demand for automobiles worldwide. Disruptions in the automotive industry have directly impacted the production and consumption of lubricants in the automotive and transport industries. The demand for synthetic lubricants will be driven majorly by the automotive sector. As the global production of motor vehicles returns to its pre-pandemic levels, the demand for synthetic lubricants will inevitably rise.
Engines need high-performance lubricants to keep up with today's lighter, more powerful vehicles. Synthetic lubricants facilitate quick and efficient fuel passage in the engine, increasing fuel economy. High-mileage engines require more expensive but long-lasting synthetic lubricants of a higher quality. Higher profit margins for manufacturers of high-quality synthetic lubricants will contribute to expanding the market.
In the last decade, the automotive sector has undergone many technological advancements, with manufacturers looking to produce sustainable, lightweight, and fuel-efficient vehicles. Electric vehicle sales have increased and are expected to gain further momentum during the forecast period. The regulations against ICE (Internal Combustion Engine) vehicles have fueled the growth of electric and hybrid vehicles. In electric vehicles, lubricants prevent copper corrosion in electrical components in EVs and HEVs (Hybrid Electric Vehicles).
Additionally, synthetic lubricants are used to control thermal properties in EVs. Synthetic lubricants with low viscosity and new operating conditions in EVs are solving new challenges in the automotive industry. Synthetic lubricants have become more critical as manufacturers shift to ultra-low viscosity lubricants with desirable physical properties. A synthetic lubricant has enhanced oxidative stability, allowing for prolonged product life, drain intervals, and desired electrical qualities during the lubricant's lifetime, fueling market expansion.
Increasing demand for bio-based lubricants has challenged synthetic lubricant manufacturers as many countries strengthen their regulations regarding synthetic chemicals used in vehicles. Bio-based lubricants have been widely utilized in Europe for more than 20 years due to regulations that make bio-based lubricants a necessity. Bio-based lubricants have many advantages, such as less toxicity, spill remediation, and high viscosity, creating challenges for synthetic lubricants.
Fuel economy is a top priority for both manufacturers and consumers. Manufacturers are attempting to produce more fuel-efficient automobiles, and consumers demand fuel-efficient new vehicles. The market for fuel-efficient cars will grow significantly as the cost of gasoline and diesel climbs. Numerous ways exist to improve fuel economy and select the appropriate synthetic lubricants.
Synthetic lubricants minimize engine wear, provide better protection during cold, and extend oil change intervals. Unlike conventional lubricants, synthetic lubricants do not solidify at negative or exceedingly cold temperatures because they lack waxes. Moreover, engine and gear oil require no additional effort to circulate during engine startup. This results in less energy loss and improved fuel efficiency. Therefore, the demand for higher fuel-economy vehicles is expected to generate tremendous opportunities for synthetic lubricants market growth.
Based on region, the global synthetic lubricants market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
Asia-Pacific is the most significant global synthetic lubricants market shareholder and is estimated to grow at a CAGR of 3.66% over the forecast period. Asia-Pacific is an emerging market since nearly half the world's urban population resides in Asian cities, accounting for two-thirds of the world's urban population growth. Major factors driving the growth of synthetic lubricants include the increasing demand for industrial machinery and Asia-Pacific becoming a manufacturing hub. In Asia-Pacific, China is the major consumer of synthetic lubricants, followed by Japan, India, South Korea, and Indonesia. China's lubricant consumption was expected to grow by around 3% to 8.2 million tons in 2021, according to Chinese research firm Oilchem, boosted by the demand from new infrastructure projects. As per the China Association of Automobile Manufacturers, China sold 2 million passenger cars in January, an increase of 26.8 percent from January 2020, when the pandemic struck the country's automobile industry.
North America is anticipated to exhibit a CAGR of 3.15% over the forecast period. The demand for synthetic lubricants in the region is driven by the enormous size of the end-user industry, such as automotive and chemical manufacturing and increasing industrial output. Similarly, the region leads manufacturing innovations, reinforced by comprehensive product development emphasizing energy efficiency, weight reduction, reduced lifecycle costs, and sustainability. Synthetic lubricants that are innovative and environment-friendly will witness prominent expansion during the forecast period. Although EV sales in the US have fluctuated over the last five years, sales of over 310,000 electric cars were recorded in 2021, and the upward trend is projected to continue due to improvements from manufacturers such as Tesla and Toyota.
Additionally, synthetic lubricants used in EV components will gain demand as the demand for EVs grows, resulting in the overall expansion of the synthetic lubricants industry. According to the Aerospace Industries Association (AIA), North America accounted for more than 53.6% of global aerospace parts manufacturing in 2021. This scenario is expected to remain consistent during the forecast period due to the rising air traffic in the region. Aerospace manufacturing is expected to fuel the demand for synthetic lubricants used in manufacturing equipment.
Europe is home to some of the world's most developed economies, including the UK, France, Italy, and Spain. The EU contributes around 76% of Europe's overall GDP. An automobile is the leading manufacturing business in the market. Europe has grown rapidly in terms of living standards, per capita income, productivity standards, and adoption of innovation and technology since the beginning of the industrial revolution. The region's growing economic prowess has accelerated urbanization, with residents choosing more personalized and smart houses to better their lifestyles. Expanding the industrial sector has increased the demand for synthetic lubricants.
Brazil and Mexico drive the Latin American synthetic lubricants market due to the growing industrial output and use of lubricants in many industrial applications. Mexico has become a new manufacturing hub due to low labor costs and proximity to the US and Canada than any other country. On the other hand, Brazil has witnessed significant development in the power generation sector. The automotive sector is expected to expedite the growth of the synthetic lubricants market in Brazil.
The Middle East and Africa was the synthetic lubricants market's lowest revenue producer. However, based on the expanding investment prospects over the next five years, there are considerable growth opportunities from potential markets such as Oman, Qatar, and Kuwait throughout the projected period. The Middle East's industrial industry is substantially transforming due to fast technological advancements. In addition, the stable growth of the industrial and manufacturing sectors in the region and the increasing adoption of heavy machinery are expected to drive the demand for synthetic lubricants in the Middle East and Africa region. The manufacturing sector in the Middle East is witnessing a significant change caused by rapid technological developments that can boost the demand for advanced synthetic lubricants.
The global synthetic lubricants market is bifurcated into application, type, and end-user.
Based on application, the global market is segmented into engine oil, transmission fluids and hydraulic fluids, metalworking fluids, greases, and others.
The engine oil segment is the largest contributor to the market and is projected to exhibit a CAGR of 3.54% over the forecast period. Synthetic lubricants include more refined base oils than conventional mineral oils, increasing engine protection and performance. All of them are created from crude oil extracted from Earth. In addition, compared to conventional engine oils, synthetic engine oil lubricants exhibit higher thermal and oxidative stability and reduced volatility, rendering them a perfect tool for lowering the overall cost of ownership for automotive engines. The durability factor associated with synthetic lubricants is expected to fuel the market growth.
Metalworking fluid is a designed mixture of oils, water, and other elements that facilitates and enhances metalworking operations by providing lubrication and heat removal. Metal bending and metal cutting are examples of such metalworking operations. Oils and grease have been used as lubricants, while water has been used as a coolant throughout history. The use of metalworking fluids developed quickly during the 20th century, owing to the fast rise of developing sectors such as automobile, rail, and aerospace. In addition, synthetic metalworking lubricants are aqueous, clear solutions for light to medium machining and grinding. They have no greasy lubricant and are the most effective for cooling. Solution synthetics are typically good at separating tramp oil and keeping the machined component and the machine tool clean.
Based on end-users, the global market is bifurcated into power generation, automotive and transportation, heavy equipment, food and beverage, and others.
The automotive and transportation segment dominates the global market and is estimated to exhibit a CAGR of 3.56% during the forecast period. A synthetic automotive lubricant is responsible for lubricating vehicle components to reduce friction. It also performs numerous other functions. It aids in the cleaning, cooling, and preventing rust and corrosion of engine components. In contrast, modern industrial lubricants can now serve various functions due to advancements in the automotive lubricant industry. Lubrication and engine maintenance can go a long way toward ensuring a damage-free automobile voyage. It has the potential to lengthen the lifespan of automotive engines and substantially reduce future major maintenance costs.
Heavy-duty diesel engine oils are a type of lubricant created specifically for trucks, commercial vehicles, buses, and agricultural and heavy-industrial machinery, such as scrappers, excavators, and graders. They are ideal for diesel engines due to their improved soot management and acid neutralization characteristics. Effectively lubricating the guts of a heavy-duty engine is essential for reducing running and maintenance costs, but it goes beyond simply applying a protective oil layer.
In addition, heavy-duty engine oils are designed to disperse soot and manage sludge, extending the life of your engine. Hydraulic lubricants such as water-based fluids and synthetic lubricants are used as a medium in the hydraulic components of machinery. These hydraulic fluids are used in a wide range of hydraulic machinery, including moving loading shovels and other earth-moving equipment, operating directional systems, braking, power steering, and transmission systems for excavator backhoes and industrial equipment as they operate under thousands of tons of pressure while maintaining high performance.
Based on type, the global market is segmented into polyalphaolefin, esters, and polyethylene glycol.
The polyalphaolefin segment owns the highest market share and is projected to grow at a CAGR of 3.58% over the forecast period. PAOs (polyalphaolefin) are industrial and automotive lubricants' most popular synthetic base stock. It's a synthetic hydrocarbon (SHC) that matches the best hydrocarbon (branched, non-ring) structure present in mineral oils, eliminating many of the drawbacks of mineral oil lubricants, like poor low-temperature fluidity, low viscosity index, sludge deposits, and excessive volatility. In addition, the use of PAO-based lubricants has extended to include circulating and gear oils. Compressor, hydraulic, and turbine fluids, as well as gear oils and metalworking fluids, were later employed in a variety of industrial applications.
PAG-based lubricants in mineral oil are an uncertain aspect of mineral-based lubricants, which has enabled synthetic lubricants to have widespread adoption. This incompatibility with many but not all PAG lubricants can make system conversions from mineral oil to PAG synthetic-based lubricants more expensive and time-consuming. Polyethylene Glycol synthetic lubricants have better efficiency than mineral-based lubricants, which is expected to fuel market growth further.