Lubricant demand in India – including process oils – rebounded to 2.8 million metric tons in 2021 and is expected to grow at a compound annual rate of 2% through 2026 to around 3 million tons, consultancy Kline & Co. projected.
Factors driving recovery from impacts of the coronavirus pandemic included a rebound in demand for lubes used in two-wheelers and off-highway vehicles.
Kline’s estimate of 2021 demand was up from around 2.5 million tons in 2020. Demand in 2021 was almost 1% higher than in 2019, before the health crisis.
Kline pegged the country’s consumer automotive lubricants demand last year at just under 500,000 tons, about 3% higher last year than in 2019.
“Motorcycle oil demand has grown significantly, and that is what is driving demand in the consumer segment,” Hareesh Nalam, a project manager in Kline’s energy practice, said during an online webinar on Aug. 3. “In 2021 the lubricant engine oil demand from the motorcycle oil segment was strong mainly because of people using personal mobility to commute and avoiding public transport. That trend started in 2020 but continued to some extent in 2021 as well.”
He added that the company’s analysis indicated demand for passenger car motor oil had not recovered to 2019’s level in 2021. “Definitely the vehicle parc has increased for two-wheelers and four-wheelers both, but in four-wheelers the lubricant demand has not yet recovered.” However, he added, the trends in such demand in India this year indicated it was growing significantly.
The country’s commercial automotive lubricant demand was down slightly compared to 2019, at just over 800,000 tons.
Lubricants demand for off-highway – agriculture, construction and mining – recovered to 2019 levels, but the on-highway segment – fleets and dealerships and owner-operators – had yet to recover to pre-pandemic levels, he said.
Factory fill demand remained strong both in 2020 and 2021, he said, mainly due to strong production in the farm tractor category. He explained that mechanization in India’s farm sector and a recovery in the country’s construction and mining sector resulted in the off-highway segment’s lube demand proving stronger in 2021 than in 2019. The farm tractor production and domestic sales of farm tractors grew significantly even in 2020, he noted, and growth proved strong in 2021 as well. “These tractor sales have dropped slightly in 2022 but we have to see how year ends,” he said. “We still expect to see a lot of tractor sales happening that will help in farm mechanization and help the industry through lube demand growth”
On-highway includes three-wheelers, buses and trucks. He said that part of the reason the on-highway segment hasn’t recovered is the reduced mileage covered by trucks and also the fact that lubricant oil drain intervals are gradually widening.
Including process oils, India’s industrial lubricants demand totaled just under 1.6 million tons last year. Process oil accounted for more than half of that. Trailing in demand in the category were hydraulic oils, metalworking fluids, industrial engine oils, greases and other general industrial oils. Close to 75% of India’s industrial lubricants were consumed by only three industrial sectors in 2021 – power, chemicals and automotive, Nalam noted. Trailing were the metals category and aviation, marine and railways, among others.