Synthetic Lubricants Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Synthetic Lubricants Market is Segmented By Type(Polyalphaolefin, Esters, Polyalkylene glycol (PAG), Group III (Hydrocracking), Others), By Product Type(Engine oil, Hydraulic fluids, Metalworking fluids, Compressor oil, Gear oil, Turbine oil, Transmission fluids, Refrigeration oil), By End-User(Automotive, Construction, Mining, Metal Production, Cement Production, Power Generation, Oil & Gas, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis 2023 - 2030

Synthetic Lubricants Market Overview

Report on Global Synthetic Lubricants by DataM Intelligence estimates the market to grow at a CAGR 5.79% during the forecast period 2023 - 2030. Demand from manufacturing, construction, and mining sectors in Asia Pacific is rising. Competitive rivalry intensifies with ExxonMobil Corporation, Chevron Corporation, Sinopec Limited and others operating in the market

Synthetic lubricants are made of oil components that have been manufactured synthetically by reaction of chemical compounds, often petroleum-based, such as Esthers, Poly Alpha Olefin (PAO) instead of refined from existing petroleum crudes or vegetable oils. The chemical compounds are composed by breaking down and then rebuilding petroleum molecules. Under a microscope, a drop of synthetic lubricant shows millions of molecules of almost the same size and structure.

Synthetic lubricants are often marketed as having superior performance when compared with conventional ones. In addition, stringent environmental regulations on the automotive sector to reduce carbon emission is anticipated to boost the synthetic lubricant market and create opportunities for artificial lubricant manufacturers.

Synthetic Lubricants Market Scope

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Synthetic Lubricants Market Dynamics 

Stringent environmental regulations for reducing vehicular emissions, improving fuel quality, and increasing industrialization in emerging economies drive the synthetic lubricants market.

Stringent environmental regulations for reducing vehicular emissions and improving the quality of the fuels used to drive the synthetic lubricants market

Governments across the world are emphasizing the need for more stringent environmental regulations. For instance, the U.S. EPA regularly modifies and enforces several norms for reducing vehicular emissions and improving the quality and efficiency of the fuels used. Besides, the European Union (EU), in 2020, imposed stringent rules that are to be followed by manufacturers of passenger vehicles and light-duty vehicles under the EU light-duty vehicle CO2 regulation. As per the EU regulation, the target was to reduce CO2 emissions by 3.1% between 2017 and 2020. There is an obligatory CO2 emission standard for light commercial vehicles and new passenger cars, whereas heavy-duty vehicles' CO2 standards are expected to be proposed shortly.

Therefore, the increasingly stringent regulations on vehicular emissions are anticipated to increase the consumption of synthetic lubricants. The use of more efficient and effective synthetic lubricants can significantly reduce carbon emissions from vehicles.

Increasing industrialization in emerging economies is expected to drive the synthetic lubricants market

The extensive industrial growth in Asia-Pacific has been fueling the growth of the synthetic lubricants market for the past few years and this is expected to continue over the forecast period. Domestic and foreign investments in end-use sectors such as energy, manufacturing, construction, and mining have consistently increased over the past decade. China's GDP growth increased by 6.9% in 2017, which entails increased industrial development and sales of synthetic lubricants. Over the past decade, India has attracted several investments in construction, cement, steel, and energy in key industrial sectors. The economic outlook of India has been very optimistic.

The manufacturing sector in developing economies is growing. The government encourages the sector by liberalizing policies and providing additional incentives such as land at cheap rates and faster clearances from all the concerned departments. Therefore, it is expected to drive the sales of synthetic lubricants during the forecast period.

The high cost of synthetic lubricants is expected to hinder the market growth

The most glaring downside of synthetic lubricants is their cost. The price of synthetic lubricants is around two to four times that of conventional oil. The price of silicone-based synthetic lubricants can go as high as 20 times that of mineral oil lubricants. Price plays a key role in choosing lubricants in major developing markets such as India, Africa, South America, and other regions. Reducing the cost of synthetic lubricants, especially in price-sensitive markets, is a major challenge for the market players and thus impacts their market growth.

COVID-19 Impact on Synthetic Lubricants Market

All lubricant manufacturers are heavily dependent on the timely and full supply and delivery of base oils, additives, and chemicals crucial to developing lubricants. The production process involves the manufacturers selecting and mixing raw materials and developing tailor-made lubricants for various applications in collaboration with OEMs.

The COVID-19 pandemic resulted in shortages in the supply of raw materials and presented the industry with new challenges, including the lack of availability of materials and the dependency on fewer suppliers. According to Journal Lubes n Greases, 2021, the base oil supply in the Middle East and Europe has been severely constrained since the end of 2020, perhaps more than in other regions. Industry analysts say the flow is unlikely to increase in the first half of this year

Synthetic Lubricants Market Segmentation Analysis

Based on end-user, the synthetic lubricants market is majorly segmented into Automotive, Construction, Mining, Metal Production, Cement Production, Power Generation, Marine (Deck Manufacturing), Oil & Gas, and others.

Over the years, the automotive industry has witnessed growth in vehicle production and sales. For instance, as per the OICA, global vehicle production in 2017 was around 97 million units. Currently, the automotive industry is witnessing substantial growth in Asia-Pacific and North America, among other regions and the annual sales of vehicles have increased. Technological advancements have stoked the growth of the automotive in the region.

One of the world's five biggest automotive markets, Brazil is a major base of operations for Fiat Chrysler Automobiles, General Motors, N.V., Volkswagen, and Ford. In 2017, overall automotive sales soared by 9.2%. The increasing population in countries such as Russia and Brazil will also result in further growth of the automotive industry shortly. The increasing vehicle production is considered a positive factor responsible for the growth of the synthetic lubricants market.

In addition, improved road infrastructure, the increasing average age of vehicles, reduced scrappage rate, and rising vehicle sales contribute to the growing vehicle parc. The increasing number of vehicles on the road has a significant impact on the demand for synthetic lubricants.

Global Synthetic Lubricants Market Geographical Share

The Synthetic Lubricants market is segmented into North America, Europe, South America, Asia-Pacific, and Middle East & Africa based on geography.

Europe is projected to dominate the synthetic lubricants market over the forecast period. The significant investment in blending plants for synthetic lubricants in the Netherlands and Russia, among other countries, is driving the market in Europe. In addition, stringent regulations on CO2 emissions have increased the demand for fuel-efficient lubricants, driving the synthetic lubricants market in the automotive and transportation sector. Several national ecolabels and schemes and one international standard have been developed in recent years, setting requirements for lubricants' ecological and technical characteristics. The adoption has increased the demand for synthetic lubricants in various industrial and automotive applications.

Moreover, the extensive industrial growth in Asia-Pacific has been fueling the growth of the synthetic lubricants market for the past few years and this is expected to continue over the forecast period. Domestic and foreign investments in end-use sectors such as energy, manufacturing, construction, and mining have consistently increased over the past decade. China's GDP growth increased by 6.9% in 2017, which entails increased industrial growth and sales of synthetic lubricants in synthetic Lubricants Companies and a Competitive Landscape

The Synthetic Lubricants Market is highly competitive with the presence of local as well as global companies. Some of the key players contributing to the market's growth include Royal Dutch Shell plc, ExxonMobil Corporation, British Petroleum PLC, Chevron Corporation, Total SA, Sinopec Limited, Lukoi, Indian Oil Corporation Ltd., Fuchs Group, Idemitsu Kosan Co. Ltd., among others. The major players are adopting several growth strategies such as product launches, acquisitions, and collaborations, contributing to the growth of the Synthetic Lubricants Market globally.

Royal Dutch Shell plc

Overview: Royal Dutch Shell plc, commonly known as Shell, is an Anglo-Dutch multinational oil and gas company. It is headquartered in Hague, Netherlands.

Product Portfolio: Royal Dutch Shell plc offers Shell Helix, a fully synthetic oil manufactured from 100% synthetic base stock and high-quality additives. The company adds its proprietary Active Cleansing Technology to these high-quality synthetic base oils to create motor oil that provides superior cleansing and protection for today's engines.

Key Developments:

In February 2021, Shell Rotella, a Royal Dutch Shell plc lubricant brand, announced carbon-neutral synthetic lubricants for heavy-duty engines in North America.