The market for general industrial oils is anticipated to register a CAGR of over 2% during the forecast period. These oils include various types and are engineered to enhance the performance and running cycles of different industrial machinery.
- Increasing electricity production in countries, like China, India, and Japan, is likely to drive the market for general industrial oils. Additionally, a rise in the manufacturing of food and beverage products is, in turn, resulting in the increasing usage of industrial oils, such as hydraulic fluids and greases.
- Usage of electric drives as an alternative to steam and gas turbines is increasing, thus, lowering the usage of general industrial oils in turbines. This electrification of mechanical drives also lowers emissions and reduces environmental taxes.
- Increasing capacity of wind turbines worldwide and growing automobile production are projected to act as opportunities for the market in the future.
Key Market Trends
Increasing Demand from Power Generation
- General industrial oils are used in steam turbines, boiler feed pumps, rod, and bowl mills for power generation. Industrial oils are employed in various energy generation sectors, such as coal, nuclear, solar, and wind, as they help in enhancing equipment reliability and uptime.
- Industrial oils have various advantages: these oils increase coal and gas power plant’s productivity, help trouble-free working in the hydroelectric sector, by making these equipment to operate at maximum efficiency.
- According to BP’s statistical review of world energy, the power sector is considered to be one of the biggest markets for energy, adopting over 40% of primary energy, through renewables and electrification. Renewables and nuclear power met the majority of the growth in demand, as per IEA.
- According to IEA, World electricity demand grew by 4% from 3.1%, with coal and gas-fired power plants growing considerably.
- All the aforementioned factors are expected to drive the global industrial oils market, during the forecast period.
South Africa Country to Dominate the African Region
- The South African economy has been in a crisis since 2016, with depreciation in its currency value and high unemployment rate, which have caused the shrinkage of the economic growth. South Africa is the largest recipient of FDI from the United Kingdom. As a result, the United Kingdom’s exit from the European Union has had a negative effect on the South African economy.
- However, the government is planning on improving new businesses, promoting investments, and building up consumer confidence.
- With rising demand for electricity from the industrial and domestic sectors, the need for power generation is increasing drastically, thereby, augmenting the growth of the lubricant oil market in the country.
- In the recent times, a slight decline has been observed in commercial and passenger aviation in South Africa, owing to slow economic growth and higher operational costs involved.
- Global players, such as Airbus and Boeing, are expecting strong growth rates in the commercial aviation segment in the coming years in the African region, and are looking forward for partnerships and joint ventures as viable options for expanding their footprints in the market.
- Though the South African building and construction industry has been witnessing a sluggish growth, it remains a vital industry, as it fulfils a major role in economic growth and infrastructure development. The industry is expected to rebound when economic conditions improve and investment in the industry increases.
- Moreover, with the rising chemical manufacturing in the country, the consumption of general industrial oils is further likely to increase in the coming years.
- The growth in these industries is expected to provide growth opportunities to the general industrial oils market during the forecast period.
The general industrial oils market is fragmented in nature. In terms of market share, few of the major players currently dominate the market. Key players in the general industrial oils market include Exxon Mobil Corporation, Royal Dutch Shell Plc, Chevron USA Inc., Castrol Limited, and China Petrochemical Corporation (Sinopec), among others.
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