Synthetic Lubricants Market

Updated on : April 01, 2024

Synthetic Lubricants Market

The global synthetic lubricants market was valued at USD 41.2 billion in 2023 and is projected to reach USD 48.0 billion by 2028, growing at 3.1% cagr from 2023 to 2028. When it comes to performance, synthetic lubricants are better to traditional mineral-based oils. They offer increased resistance to oxidation, thermal stability, and viscosity stability, all of which can contribute to increased equipment life and efficiency. Synthetic lubricants are often formulated to be more environmentally friendly, with lower volatility and reduced emissions. This appeals to industries and consumers seeking to minimize their environmental impact.

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Synthetic Lubricants Market Dynamics

Driver: Growing construction industry in Asia Pacific

The Asia Pacific region's rapid urbanisation has increased demand for infrastructure, commercial, and residential development in many of its member states. In order to sustain the growing urban centres, new structures such as highways, bridges, and other infrastructure are required as populations increase and move to metropolitan areas. Many countries in Asia Pacific have been experiencing strong economic growth, leading to increased investment in construction projects. Rising incomes, expanding middle-class populations, and government initiatives to boost infrastructure development all contribute to the growth of the construction industry.

Restraints: Rise in demand for alternative fuels

The rise in alternative fuels, such as electric vehicles (EVs) and renewable energy sources, could potentially have some impact on the synthetic lubricants market. Since EVs usually require less lubrication than internal combustion engine vehicles, there may be a minor decrease in the demand for lubricants, including synthetic lubricants, as EV usage rises, particularly in the automotive sector. It's crucial to remember that EVs still require lubrication for parts like gears, bearings, and seals, which could result in a continued requirement for lubricants even at a lower level.

Opportunities: Advancements in synthetic lubricants technology

Typically, synthetic base oils—which can come from a variety of sources like natural gas, coal, or biomass—are used to manufacture synthetic lubricants. New base oil types have emerged as a result of base oil technology advancements, including Group IV (polyalphaolefins) and Group V (esters). These types of base oils offer superior qualities over conventional mineral oils, including a higher viscosity index, improved oxidative stability, and better low-temperature performance. Synthetic lubricants are becoming more and more blended with nanotechnology to improve their lubricating capabilities at the nanoscale. Equipment can function more efficiently and last longer when friction and wear between moving parts are reduced by using nanoparticles, such as those made of graphene or molybdenum disulfide.

Challenges: Rising raw material prices

Rising raw material prices can indeed have a significant impact on the production costs of synthetic lubricants. A large amount of the expenses associated with producing synthetic lubricants are incurred in the procurement of raw materials, including additives, synthetic base oils, and other chemical components. The cost of producing synthetic lubricants immediately rises in response to increases in the pricing of these basic ingredients. This could therefore result in increased costs for synthetic lubricant goods, which might have an effect on end users' and consumers' demand.

Synthetic Lubricants Market Ecosystem

The ecosystem includes companies manufacturing synthetic lubricants, such as Shell PLC, BP p.l.c., Exxon Mobil Corporation, TotalEnergies SE, FUCHS, Chevron Corporation, Idemitsu Kosan Co., Ltd., China Petroleum & Chemical Corporation, LUKOIL, and Petroliam Nasional Berhad (PETRONAS).

Based on the type, PAO was the largest segment of the synthetic lubricants market, in terms of value, in 2022.

Polyalphaolefin (PAO) was the largest synthetic lubricant base oils used in the industry, in terms og value, in 2022. PAOs are a type of synthetic hydrocarbon polymer that offer excellent lubricating properties, thermal stability, and oxidation resistance. These qualities make PAOs suitable for a wide range of applications across various industries, including automotive, industrial, aerospace, and marine. PAOs typically have a high viscosity index, which means their viscosity changes less with temperature variations compared to conventional mineral oils. This makes PAOs well-suited for use in applications where consistent lubrication performance is critical.

Based on product type, engine oil was the largest segment of the synthetic lubricants market, in terms of value, in 2022.

Synthetic engine oils offer several advantages over conventional mineral-based oils, making them popular choices for modern engines. When it comes to performance, synthetic engine oils usually outperform conventional ones. They provide superior viscosity stability across a broad temperature range, guaranteeing ideal lubrication in both high-temperature and cold-start operation scenarios. This increases engine longevity and efficiency.

Asia Pacific accounted for the largest market share of the synthetic lubricants market, in terms of value, in 2022.

Asia Pacific is the leading consumer of synthetic lubricants. The Asia Pacific region is experiencing rapid industrialization across various sectors, including automotive, manufacturing, construction, and energy. As industries expand and modernize, there is a growing demand for high-performance lubricants to optimize equipment efficiency and reliability. One of the biggest consumers of synthetic lubricants is the automotive sector in the Asia Pacific area. The need for lubricants for contemporary engines and drivetrains is expanding due to factors like rising vehicle ownership, rising vehicle sales, and stricter emissions restrictions.

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Synthetic Lubricants Market Players

The key players in this market are  Shell plc (UK), Exxon Mobil Corporation (US), BP p.l.c. (UK), Chevron Corporation (US), China Petroleum & Chemical Corporation (China), TotalEnergies SE (France), FUCHS (Germany), Idemitsu Kosan Co., Ltd. (Japan), LUKOIL (Russia), and Petroliam Nasional Berhad (PETRONAS) (Malaysia). These are the key manufacturers that secured a major market share in the last few years.

Read More: Synthetic Lubricants Companies

Synthetic Lubricants Market Report Scope

This report categorizes the global Synthetic Lubricants market based on type, product type, and region.

Based on type, the synthetic lubricants market has been segmented as follows:

• PAOs
• PAGs
• Esters
• Group III (Hydrocracking)

Based on product type, the synthetic lubricants market has been segmented as follows:

• Engine Oils
• Hydraulic Fluids
• Metalworking Fluids
• Compressor Oils
• Gear Oils
• Transmission Fluids
• Refrigerant Oils
• Turbine Oils

Based on region, the synthetic lubricants market has been segmented as follows:

• North America
• Asia Pacific
• Europe
• Middle East & Arica
• South America

Recent Developments

• In January 2024, Shell plc completed the acquisition of MIDEL and MIVOLT, from Manchester-based M&I Materials Ltd. The acquisition of MIDEL enables Shell to complement its differentiated position in Transformer Oils used for power distribution, offshore wind parks, utility companies, and traction power systems.
• In January 2023, TotalEnergies SE signed an agreement with CEPSA to acquire its upstream assets in the UAE.
• In February 2022, Chevron Corporation made an announcement that it entered into an agreement with Bunge North America, Inc. to create renewable feedstocks.
• In April 2021, FUCHS WISURA GMBH was merged with its sister company FUCHS SCHMIERSTOFFE GMBH on April 01, 2021. FUCHS SCHMIERSTOFFE, one of the leading lubricant companies in the German market, that develops, produces, and distributes lubricants and has approximately 1,000 employees at 3 production sites to date - Mannheim, Kiel, and Wedel.
• In May 2020, Exxon Mobil introduced next-generation multi-fuel marine cylinder oil which is suitable for safe and reliable use with all low-sulfur fuel types, including LNG.

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