The market for North America lubricants is expected to grow at a CAGR of about 2% during the forecast period. Growing demand form construction and power generation industries along with increasing demand for high-performance lubricants are driving the market. On the flip side, the growing population of electrical & hybrid vehicles, increase in the life-time of lubricants and stringent environmental regulations coupled with unfavorable conditions arising due to the COVID-19 outbreak are hindering the market growth.
- The North America lubricant market is expected to grow during the forecast period owing to the growing demand from the construction and power generation industry.
- United States to dominate the market with largest consumption in the North American Region
Key Market Trends
Growing Demand form Construction and Power Generation Industry
- Power generation is one of the most important sectors among all other industries, as it provides electricity, the basic requirement for any industry to run its operations as planned.
- The growing industrialization and advancements in technologies resulting in the commencement of new plants, thereby increasing the demand for electricity. Turbines are basic elements in energy generation regardless of sources such as wind, thermal, and hydropower. Other than turbines, lubricants are used in pumps, fans, compressors, etc., in the power generation industry.
- In construction or power generation, lubricants are used to protect the equipment and movable parts from heat, dust, and moisture. They reduce friction and provide dealing, protection, and cooling. The growing investments in power generation and construction are driving the market.
- In 2019, a total of 9,177 MW of power generation capacity is added to the Canadian grid. As of January 2020, Canada has an installed power generation capacity of more than 655 TWh (terra watt-hours) and the current production is around 626 TWh with more than 60% coming from hydropower.
- The capital investment in non-residential construction and machinery & equipment is expected to rise to USD 275.5 billion in 2020, an increase of 2.8% from 2019. With the growing population, the increasing demand for power and infrastructure needs are expected to drive the market for North America lubricants during the forecast period.
United States Region to Dominate the Market
- The United States region is expected to dominate the market for lubricants in the North American region during the forecast period due to an increase in demand from the end-use industries such as power generation, construction, and automotive.
- According to the US Census Bureau in April 2020, the value of construction in the United States was around USD 1,346,166 million. The share from the residential sector was about USD 544,312 million and non-residential was approximately USD 801,854 million. The value of total construction referring to educational institutes in April 2020 is USD 14,913 million, warehouses construction is valued at USD 39,169 million, health care constructions is USD 36,764 million. The growing construction activities in the non-residential and residential sectors are driving the market.
- The automotive industry is one of the largest consumers of lubricants in the region. The automotive production in the United States is around 108 million vehicles in 2019 which is down by 3.7% from 2018. The decline in production, the growing number of electric vehicles, and stringent environmental regulations in the region have hindered the market.
- The United States is one of the largest producers of oil& gas in the region with around 12.23 million barrels per day, but due to unprecedented conditions due to the COVID-19 outbreak, the consumption of oil & gas is down by at least 5 million barrels per day due to lockdown in various countries resulting in the complete shutdown of travel, tourism, and e-commerce industries. Due to the decline in demand, the rig count has fallen significantly, to 266 from 967 in June 2019. These factors are likely to affect the consumption in 2020 and are expected to reach normal by early 2021.
- The aforementioned factors, coupled with government support, are contributing to the increasing demand for the lubricants market in the United States region during the forecast period.
The global North America lubricants market is fragmented with players accounting for a marginal share of the market. Few companies include Chevron Corporation, Exxon Mobil Corporation, HollyFrontier Corporation, Valvoline LLC, and Total.
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