21 November 2018

Table of Contents for Industry Focus - Lubricants & Engine Oils





Industry Focus- Lubricants & Engine Oils

Lubricants on the roll!

 

The growing EPC infra projects, added with the mining ordinance which has propelled the mining sector has lead to an overall turnaround for all three sectors, and the ECE industry in particular. The demand gradients are slippery with plenty of players in the market, and only branded lubes co-developed with equipment OEMs will sell more feels ROHAN AMBIKE.

 

India’s ECE market is projected to grow at a healthy CAGR of 20-25 per cent over the next few years, bringing the market to between $16 billion and $21 billion by 2020. Based on this there will be a concomitant rise in demand for heavy duty lubricants and engine oils in India. The Indian lubricants market size is expected to witness growth over 11 per cent , in term of revenue. The automotive engine oil market revenues are expected to grow at the CAGR of 19 per cent till 2018. Major demand drivers will be the construction and mining sectors, and the new trend is demand for branded products.

 

The India lubricant market is expected to register a CAGR of 4.64 per cent , during the forecast period, 2018-2023. The major factors driving the growth of the market are the increasing vehicular production along with the growing industrial sector. Lubricants are majorly used in the industrial sector for the proper functioning of machines. They are also used in automobile for smooth functioning and longevity of engines and other components. Lubricants are available in liquid, semi-fluid, or solid state, and possess various characteristics, such as, high viscosity index, high level of thermal stability, low freezing point and high boiling point, all of which help to reduce friction between surfaces of machine parts and the rate of wear and tear without compromising operational efficiency.

 

The Indian lubricants sector is a 2.8 mmtpa (3.1 bn litre, conversion of 1.11x) market with the automotive segment holding 42 per cent volume share, industrial 23 per cent, transformer and white oils 23 per cent, process oils 8 per cent, and greases 4 per cent. The market has over 30 players, both PSU and private, domestic and industrial, integrated and standalone. Castrol has an estimated 55 per cent market share along with PSU and OMCs like IOCL, BPCL, HPCL in the retail trade, 20 per cent is with international players like Total, Shell, Mobil, Valvoline, Motul, and 25 per cent is with other private players, including Gulf/GOLI, Tide Water Oil, Savita, Raj, etc.

 

 

Heavy Equipment Lubricants a Potential Segment

 

A great deal of demand growth for lubricants is expected from the construction and agriculture industries. Growing investments in the infrastructure sector and other strategic initiatives of the Government of India are expected to boost the construction sector in the country, which, in turn, is anticipated to boost the demand for the lubricants used in construction activities and other heavy equipment in India.

 

 

 

FAST FACTS

  • The India lubricant market is expected to register a CAGR of 4.64 per cent , during the forecast period, 2018-2023.
  • The Indian lubricants sector is a 2.8 mmtpa market with the automotive segment holding 42 per cent volume share, industrial 23 per cent, transformer and white oils 23 per cent, process oils 8 per cent, and greases 4 per cent.
  • The rising trend of partnerships between original equipment manufacturers (OE

 

 

Market status

 

For engine oils, ‘India Automotive Engine Oil Market Forecast & Opportunities, 2018," has projected tremendous growth, fuelled by increasing automotive sales. The automotive engine oil market is projected at a CAGR of 19 per cent till 2018. Also enforcement of strict emission norms is also pushing the demand for engine oils. India has now overtaken Japan as the 4th biggest lubricants market in the world, with demand for industrial lubricants surging significantly.

 

Companies are offering more defined aftermarket services to compete successfully. Most of them are co-developing branded lubes along with OEMs. End users are focused on TCO, to extract substantial benefits with minimum downtime and extended life cycle for their equipment. All these have a common denominator use of hi-tech lubricants for harsh operating conditions.

 

India automotive lubricants market is projected to reach $ 9.6 billion by 2022. Surging demand for automotive lubricants is anticipated on account of increasing sales of vehicles and growing consumer awareness regarding the use and advantages of engine oils and other lubricants. Additionally, rising trend of partnerships between original equipment manufacturers (OEMs) and lubricant manufacturing companies is expected to augment demand for automotive lubricants in India over the next five years.

 

 

 

Top trends

 

Growing usage of synthetic oils in APAC

 

The synthetic oil market is currently dominated by Europe, followed by the Americas and APAC. However, APAC is expected to post a higher growth rate in the consumption of synthetic engine oil during the forecast period. Synthetic engine oil is of several types such as polyolefin (PAO), esters, polyalkylene glycol, and group III oils (hydrocracking). Currently, PAO has the largest market share, accounting for more than 50 per cent of the total market share due to several benefits with respect to other synthetic engine oils. Not only is the PAO engine oil less volatile and more oxidative, but it is also less expensive as compared to other engine oils.

 

There is growing trend where synthetic engine oils are replacing semi-synthetic and mineral engine oils. But the prices of mineral and semi-synthetic engine oils are one-third of the prices of synthetic engine oils. This hampers the sales of synthetic engine oils. However, as soon as suppliers start adopting low-cost production techniques of synthetic engine oils, these fluids will replace semi-synthetic and mineral engine oils.

 

 

 

Growing usage of multigrade lubricants

 

There has been growing usage of multigrade lubricants. This trend is predominant in Europe and North America. Multigrade oils are preferred in these regions due to their better performance in cold climates. Many countries in North America and Europe often face harsh winters. As a result, the engine start-up procedure is often delayed. Multigrade oils perform better in cold temperatures as they reduce the lead start-up time. Society of Automotive Engineers conformant lubricants uses special polymer additives that keep the viscosity of the formulation constant despite a change in temperature.

 

 

 

Constant need for technological upgrade

 

The rapid technological advances in the manufacture of machinery and automobiles are intensifying the need for environment-friendly and high-performance lubricants and lubricant additives. Therefore, lubricant manufacturers must constantly upgrade their production capabilities and product portfolio to match the revised requirements.

 

Although this results in the emergence of value-added products, it severely affects the profit margins of lubricant manufacturers. Apart from the additional costs of revised formulations, vendors also incur the capital costs associated with the technology and infrastructural upgrades. Noncompliance with the revised requirements invites regulatory attention and leads to a decline in market shares.

 

 

 

Automotive Production and Sales Driving the Market

 

The major driver for the India lubricant market is the boosting demand from the automotive industry. The sales of new motor vehicles in the country has been on a consistent rise, majorly owing to the growing middle class incomes. The automotive production in India has also been on a rising path with yearly growth rates of over 6 per cent , thus, increasing the demand for engine oils and other lubricants employed in the automotive industry. Though, mineral oils hold the largest share among all the automotive lubricants used in the country, synthetic and semi-synthetic lubricants are expected to grow at a rapid pace during the forecast period.

 

 

 

Future of lubricants market

 

In the last 120 years of petroleum, from a basic single component lubricant of the early days, today’s lubricants are complex and may contain a very large number of components, which should not only be highly synergistic to each other by themselves, but also in conjunction with the operating environment of that equipment. The operating environment can have very large variations of temperature, loading, contaminants, etc. For example, in an internal combustion engine, the lubricant is expected to perform satisfactorily under any of these conditions.

 

 

Aqueous Lubricants

 

Wouldn’t it be interesting if topping up an industrial fluid could be done by water alone? The idea of replacing conventional organic lubricants or solvents by water-based solutions is both appealing and exciting for many applications and in many different areas. Such solutions may not only have a high potential for improvements, but they also help address environmental concerns. Conventionally, these have been widely used in metal-working applications for a long time, where usually an aqueous solution of an organic, polar, surface-acting composition, which is a phosphate or phosphite of an alcohol-ether and soluble in water at room temperature, is used. Mineral or even synthetic oil-based lubricants suffer from the drawbacks of flammability, disposal problems and other hazards. Accordingly, for some time there has been increased interest in developing water-based lubricants.

 

A series of recent patents on aqueous lubricants include applications as metal-working lubricants, drawing lubricants, cold-forming lubricants, lubricants for conduits and raceways, lubricants for saw chains, non-flammable electric-discharge machining fluids, lubricants for plastic working, pre-lubricated cable fluids, smart cutting fluids, anti-traction compositions and many others signifying this fast-developing field. Such products use many compounds including PEG, polsymeric polyelectrolyte acrylates, polyalkine oxide compounds, polyacrylamide compounds and various others.

 

 

 

Slick and Super-hard Solid Lubricant Coatings

 

High-tech self-lubricating coatings can be applied to almost any metal-using engines and in machinery. Compared to uncoated surfaces, in both laboratory and engine tests, such coatings can reduce friction by up to 80 per cent and can greatly minimize wear and scuffing. Such coatings will be of considerable interest for use with newer lubricant alternatives, such as bio-lubricants, especially the ones that are biodegradable, non-toxic and sustainable. The sectors that may particularly benefit from these include shipping and railroad, yard equipment, construction equipment, conveyors, and many others. Such coatings today are looking at molybdenum, copper, silver, antimony and tin. High-tech vaporization, cold sprays, evaporation and vacuum technologies are used in their preparation. These coatings can also be nano-structured and/or nano-composite forms. These provide better performance under very severe sliding conditions. The coatings can be coupled with smart surface engineering strategies such as micro-texturing or patterning. For some applications, these coatings are now commercially available. The shortcomings of such coatings are to be clearly understood before deciding on a particular application.

 

 

 

Conclusion

 

Eventually after a sluggish start and growth, the Indian lubricant market has been witnessing a good time from the last two years. Their role in reducing friction and thus maintaining the durability and the functionality of any machine or product is a game changing one in each sector. Continued momentum in personal mobility space coupled with some recovery in commercial vehicle and industrial segments is driving the demand for lubricant in India.

 

Though rising oil prices may pose a challenge, pick up in mining and infrastructure activities will brighten the prospects of lubricant makers.

 

Ms) and lubricant manufacturing companies is expected to augment demand for automotive lubricants in India over the next five years.




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