Industrial Oils Market

Industrial Oils Market Size (2023-2028)

The industrial oils market was worth $ 63.4 billion in 2022 and is expected to grow at an annual expansion rate of 7.4%, reaching a value of $ 85.8 billion by 2028.

When you consider the world energy industry, renewable energies, and electrification, it may be the most important segment, consuming more than 40% of primary energy. Global demand for energy increased by 5%, compared to 3.4% in 2019, according to the IEA, while coal and gas-fired power plants increased significantly in 2018. Industrial oils have many advantages such as increasing the productivity of coal and gas power plants and proper functioning of hydroelectric power by maximizing efficiency. This is a key factor that will drive the global industrial oils market in the years to come. 

Lubricant degradation and maintenance issues lead to increased wear and mechanical fatigue. Millions of dollars are lost every year due to unnecessary lubrication maintenance and repair work on production machinery and equipment. Several recurring lubrication problems are common in all industries. Industrial oils are produced using hydrotreated or hydrocracked base oils, which provide an independent quality advantage over comparable products made using standard base oils. One of the tasks of industrial oils is to absorb heat and remove it from surfaces. The heat is transported to a refrigeration unit or dissipated depending on the industrial oil application. Oils greatly reduce the risk of heat damage and operating temperatures are controlled. Growing industrialization around the world is generating strong demand in the industrial oils market.

Industrial oils are used in steam turbines, boiler feed pumps, bowls, and rod mills for power generation. Industrial oils are used in various power generation sectors, such as coal, nuclear, solar, and wind power, as they help improve the reliability and availability of equipment. Renewable energies and nuclear power have covered most of the growth in demand, according to the IEA.

Industrial Oils Market Drivers:

The main factors taken into account to boost industrial oils include the shift in consumer preference for processed and frozen foods as well as the growing demand for green energy production methods. The fast-paced lifestyle, along with the significant impact of Western culture on eating habits, has fueled the demand for frozen food. In addition, an alarming increase in the pollution around the world, coupled with the rapid depletion of natural resources such as coal and petroleum, is expected to stimulate demand for green energy, thus stimulating the growth of industrial oils in the years to come. In addition, the significant growth of industrial automation in various parts of the world has particularly encouraged the replacement and improvement of machine parts which are supposed to drive the global industrial oils market in the coming years. This trend is likely to expand the production capabilities of manufacturers as well as the production time.

Industrial Oils Market Restraints:

However, the increasing rate of environmental pollution due to the use of synthetic oils as well as strict regulations are expected to hinder the growth of the market.

Opportunities in the Industrial Oils Market:

The global industrial oils market is highly fragmented with a large number of global and local players. Companies invest heavily in R&D to develop innovative products and gain a competitive advantage in the industry. There has been a shift in the trend of using bio-based raw materials due to the growing awareness of the need to reduce emissions and save energy. Industry competition includes factors such as distribution partnerships, technological innovations, product portfolio, strategic developments and capabilities.

Challenges in the Industrial Oils Market:

In addition, the elimination of these oils is another major concern. Most of the additives used in the manufacture of industrial oils are petrochemical derivatives that pose a serious threat to bodies of water when removed. Therefore, the growing concern for environmental protection related to the disposal, use and recycling of oils is limiting the growth of the market.

INDUSTRIAL OILS MARKET REPORT COVERAGE:

Market Segmentation:

Industrial Oils Market - By Source:

• Soybean

• Corn

• Sunflower

• Cottonseed

• Rapeseed

• Palm

• Others

According to the source, the palm segment accounted for the largest share of the global industrial oils market in 2020. According to WWF-UK, Indonesia and Malaysia supply more than 86% of the world's palm oil. These palm oil-producing countries are expected to offer high growth prospects in the coming years for manufacturers in various industries, both regionally and internationally.

Industrial Oils Market - By Type:

• Grade I (Light)
• Grade II (Medium)
• Grade III (Heavy)

Depending on the type, the Category I (light) segment accounted for the largest share of the industrial oils market in 2020. Category I (light) industrial oils are used in applications such as cosmetics, personal care and products pharmaceuticals. The cosmetics and personal care industry is experiencing significant growth in countries like Brazil and China. This should create a lucrative opportunity for industrial petroleum manufacturers in the years to come. In Europe, the region has more than 500 million users of cosmetics and personal care products, including shampoos, soaps and sunscreens. The region is also estimated to be a major revenue generator for industrial oil makers in the years to come.

Industrial Oils Market - By End-User:

• Biofuel
• Paints & coatings
• Cosmetics & personal care
• Pharmaceuticals
• Others

Biofuels are gaining popularity around the world due to their reduced impact on the environment. China registers the highest number of vehicles in the world. This increase in numbers is expected to further aggravate the environmental pollution problems. Therefore, industrial petroleum manufacturers are expected to experience increased penetration in the country in the coming years.

Industrial Oils Market - By Region:

• North America 

• Europe 

• Asia Pacific

• Latin America 

• Middle East & Africa 

The South African economy has been in crisis since 2019, with a depreciation in the value of its currency and high unemployment, which have caused the contraction of economic growth. South Africa is the UK's largest recipient of FDI. As a result, the UK's exit from the European Union had a negative effect on the South African economy. However, the government plans to improve new businesses, promote investment and boost consumer confidence. With the increasing demand for electricity from industrial and domestic sectors, the need for power generation is increasing dramatically, rising the growth of industrial oils market in the country. In recent times, there has been a slight decline in commercial and passenger aviation in South Africa, due to slow economic growth and rising operating costs.

Global players, such as Airbus and Boeing, expect strong growth rates in the commercial aviation segment in the coming years in the African region, and expect partnerships and joint ventures as viable options for expanding their market presence. Although South Africa's construction and construction industry has grown slowly, it remains a vital industry, playing an important role in economic growth and infrastructure development. The industry is expected to recover as economic conditions improve and investment in the industry increases. In addition, with the increasing manufacture of chemicals in the country, the consumption of industrial oils, in general, is likely to increase even more in the years to come. The growth of these industries is expected to provide growth opportunities for the overall industrial oils market during the forecast period.

Asia-Pacific is expected to register the highest CAGR from 2022-2027 due to well-established end-use industries in emerging economies such as India, Indonesia, Thailand, and Malaysia. In addition, it is predicted that a growing awareness of the higher operational efficiency of industrial equipment after the application of the lubricant will further improve the products.

Demand for industrial oils in North America and Europe is likely to remain higher despite relative stagnation in industrial growth. Growing demand for oilfield chemicals from drilling and exploration activities is estimated to drive market growth in North America. The resumption of industrial activities as well as the modernization of industrial machinery is the main factor determining the European demand for industrial lubricants during the foreseen period.

Impact of COVID-19 on the Industrial Oils Market:

The coronavirus pandemic has wreaked havoc on the global economy, pushing it down to single-digit growth. The global stock market is steadily declining. All countries have directed their resources to the health sector and to the R&D of vaccines for the treatment of COVID-19. Government-imposed national lockdowns have reduced production and the (worst-case) shutdown of manufacturing units in severely affected countries. Reduced use of machinery results in lower demand for industrial oils in countless end-use sectors. The subsequent collapse of construction industries in several countries is fueling the fire. Until the situation is improvised, infrastructure development in the private and government sectors will remain stagnant in the near future.

Industrial Oils Market Key Players:

1. Cargill (US)

2. Bunge Limited (Netherlands)

3. Wilmar International (Singapore)

4. Louis Dreyfus Company B.V. (Netherlands)

5. Archer Daniels Midland (ADM) (US)

6. Buhler Group (Switzerland)

7. CHS Inc. (US)

8. Ag Processing Inc (US)

9. A&A Fratelli Parodi Spa (Italy)

10. Gemtek Products (US)

11. AAK Kamani (India)

12. Soya Mills SA (Greece)