Renewables could be catalyst for lubes oil additives market growth.

Mixed fortunes for the lubricating oil additives market.

The lubricating oil additives market is estimated to grow by some $2bn by 2026 to reach US$ 20.4bn, according to a global forecast by MarketsandMarkets. Increasing demand for renewable energy is being seen as a major opportunity.

However, the market is currently undergoing a recovery after being negatively impacted by alternative fuels, competition from an unorganized and fragmented market supplying cheap and sub-standard products, as well as a reduction in the use of metal parts by automakers.

Not surprisingly, COVID-19 has also been a major influence on the market which has seen demand fall across the automotive sector. The pandemic's impact on the global supply chain, combined with volatility in the price of oil has also impacted the lubes additives market, with fluctuations directly affecting profitability.

Asia-Pacific (APAC) is the fastest growing market and predicted to hold the greatest value to 2026, followed by North America and Europe - the latter having seen a 1.6% rise in motor vehicle sales, according to the ACEA (European Automobile Manufacturers Association).

The report states that rising demand for motor vehicles in India and China is expected to lead to a commensurate increase in the demand for lubricants.  In particular, India has seen exponential growth, with vehicle production almost doubling year-on-year to $2.3m in the first half of 2021. As a result, and in combination with increasingly stringent emissions regulations, both markets are set to see greater demand for lubricant anti-oxidant agents.

During the forecast period (2021-2026), the BRICS countries together (Brazil, Russia, India, China, and South Africa) together are "expected to account for a large market for lubricant oil additives" based on projections of economic and population growth. 

Engine oil additives remained the dominant market in 2020 - including car, heavy duty and marine diesel and other engine applications.  As with India and China, national and continental environmental regulation will be the key factor in driving additive demand.

The industrial sector was the second largest market in 2020 and growth is set to continue to 2026 for products related to gear and process oils, hydraulic fluids and the like, where finished product usually contains between five and ten percent additives. 

Key market players identified by the report included BASF, Chevron Oronie, Lubrizol, Afton Chemical, Eurolub, Infineum, Tianhe Chemicals, and Wynn's.