The current global demand for general industrial oils (GIO) stands at approximately 6,500 kilotonnes and is projected to exhibit moderate growth over the course of the next five years. With over 50% share in the global consumption, hydraulic fluids are the most consumed GIOs by a wide margin. The share of different GIOs and grease are almost similar across all regions, with some variation in share of individual products. Hydraulic fluids are the most commonly consumed GIO in all regions, followed by gear oils and turbine and circulating oils.
Asia-Pacific, which leads the world in the mining, power generation, and manufacturing industries, is the leading region for GIOs and grease. Asia-Pacific accounts for over 40% of the total demand. North America and Europe are next, with each market maintaining around 20% share in total consumption. South America, Africa, and the Middle East fill the remaining share, with each region consuming around 8% share in total demand.
Mineral oil-based products dominate the GIOs and grease market in general; however, the usage of synthetic-based products is growing in all product categories driven by extreme operating conditions, OEMs recommendations, and increasing end users awareness of the benefits of using synthetic products in certain situations. For example, in the wind power industry, end users prefer to use synthetic gear oils due to extreme operating conditions. However, for most products, the share of synthetics in total consumption is around 10% as end users are reluctant to use synthetics due to the costs.
Compressor and refrigeration oils are an exception as the share of synthetics is more than 30% for both of these products. Consumption of synthetic compressor oils has increased due to OEMs recommendations for these products and extended warranty periods offered for new compressors by OEMs. Consumption of synthetic refrigeration oil increased as the refrigeration and air-conditioning systems manufacturing industry is moving towards the usage of refrigerants that are not ozone depleting and have low global warming potential (GWP).
Globally, Shell and ExxonMobil are the leading general industrial oil suppliers collectively accounting for approximately one-fourth of the market. Other global suppliers include Sinopec, PetroChina, Chevron, BP, Total, Lukoil, and Petrobras. These top nine suppliers globally account for around 50% of the general industrial oils market. Suppliers like Sinopec, PetroChina, and Petrobras have significant shares in the global market due to their strong presence in their respective local markets.
Globally, demand for GIOs and grease is expected to grow at a compound annual growth rate (CAGR) of 0.7% during 2014-2019, driven by growth in end-use industries. Demand for all products will increase with turbine and circulating oils leading the growth. Growth in power generation capacity around the world will sustain the growth in turbine and circulating oils. However, hydraulic fluids will continue to remain the most consumed GIO in the world.
Both mineral-based and synthetic-based products are expected to grow; however, synthetics will increase at a higher rate, albeit from a much smaller base, across all product categories. However, the usage of synthetic products will result in higher drainage intervals leading to slower growth in overall consumption. End users are also adopting fluid management services and condition-based monitoring systems, which are also expected to slow down the consumption of GIOs and grease.
Asia-Pacific will show the most growth in volume across all product categories as a result of economic growth. South America, Africa, and the Middle East will be the fastest growing regions, though from a smaller base. Economic growth will lead to increased manufacturing activity across industries driving the elevated general industrial oils consumption in these regions. Europe and North America will show moderate growth more in line with the GDP growth in these regions.
These findings will be available from Kline’s soon-to-be-published Industrial Oils and Fluids: Global Market Analysis and Opportunities report, which will serve as an excellent resource for blenders and marketers of industrial oils and fluids to build solid strategic plans and respond to competitive forces, emerging technologies, and evolving market needs.