Kline: Lube Additive Demand Still Rebounding


Global lubricant additives consumption topped 4 million tons in 2022 and is forecast to reach near 4.5 million tons in 2027, close to pre-pandemic levels of 2018, consultancy Kline & Co. estimated in a recent webinar.

An official from the firm said additive companies face a number of opportunities, including upgrades to lubricant specifications, rising requirements for fuel economy and energy savings, sustainability goals and lubricant producers wanting to formulate with API Group II and III base oils.

The firm forecasts that global lube additive demand will remain below 2018 levels by 2027 for a number of reasons.

“Part of this is due to supply chain issues and things that have happened over time – the economics globally haven’t been too great as of late,” David Tsui, a project manager in Kline & Co.’s energy practice, said during an April 6 webinar about a study the company released in March.

Another kay factor, he said, was the implementation of IMO 2020 , an international convention on air emissions from ocean-going ships. It required operators to install scrubbers to capture pollutants or to switch to cleaner fuels.

Tsui said much of the industry opted for the latter choice, reducing demand for detergents used in marine cylinder oils because cleaner oils do not require as much detergency. Developments in formulation of engine oils used in light- and heavy-duty engines led to slightly lower but more optimized additive treat rates.

Kline estimated that 1.3 million metric tons of lubricant additives were used for heavy-duty motor oils in 2022, while 1.1 million tons was used for passenger car motor oil, including for 4-stroke engines. Close to 800,000 tons was used in metalworking fluids, around 500,000 tons in industrial engine oils, about 300,000 tons in other automotive lubes and 200,000 tons in other types of lubes.

Asia-Pacific, led by China, consumed more than any other region, followed by North America, Europe, Africa and the Middle East, and South America.

Key challenges in the lubricant additives market include the impacts of vehicle electrification, projected future declines in engine oil and issues relating to health, safety, security and environment issues. An example of the latter he cited is the European Commission looking at lithium hydroxide as a potential reproduction toxin. “If they do label it that, that could impact lithium greases and other aspects,” he noted. It’s important for companies in the industry to monitor and be aware of changes that could affect chemistries going forward and things they may have planned to add to production plants or take away, he added.

Opportunities include specification upgrades, fuel economy and energy savings, meeting sustainability goals and formulating more with API Group II and III base oils.

Tsui emphasized that although vehicle electrification is a key challenge for the global lubricant additives industry, formulating engine oils for internal combustion engines will remain crucial globally. “Until we get a full transition to EVs – which is going to take quite a while – you’re going to have to meet the new fuel economy targets, the emission targets, for all the step level changes the various governments have in place,” he explained. “In order to do that, they’re going to have to continue to improve the engines and their lubricants as well. OEMS are going to continue to roll out new engines, and those new engines are going to need specification changes. We’re going to see that going forward.”

The overall growing focus by governments and businesses alike on sustainability – including carbon neutrality and overall seeking a better planet stewardship-type level – is something that will also impact lubricant additives, Tsui said.

He noted that the wider availability of and transition to Group II and III base oils – especially in industrial fluids where many products have continued to use Group I – presents an opportunity for additive package formulations.

Kline found that estimated electric vehicle lubricant and additive demand was modest in 2022, although Tsui noted EV fluid demand is rapidly growing. EV additives demand was estimated to be more than 70,000 tons in Asia-Pacific, a little over 20,000 tons in Europe and more than 10,000 tons in North America. With many original equipment manufacturers of EV still using off-the-shelf internal combustion engine fluids and greases, he said, this allows opportunities for additives industry companies to tailor products more specifically designed for use in EVs.

“These EV companies are finding issues as they start using these [off-the-shelf ICE] fluids, as vehicles get older,” he said. “They are starting to find issues not common with ICE vehicles, more specific to EVs, that do require specific type fluids.” He explained that currently most EV motors tend to be air-cooled, with the coolant solely used for cooling batteries. “There’s a possible transition towards multi use fluids that are meant to cool the transmission, lubricate gears, cool the motor and also cool batteries. We haven’t seen OEMs embrace it yet, but we do see there’s potential for things like that. That might be oil-based and require additives as well.”

Tsui noted the global lubricant additives industry has two supplier categories – component suppliers and package suppliers. Four companies are major additive package suppliers, and more than 20 other component suppliers have smaller shares of the market.

Among global lubricant additive suppliers in 2022, Kline estimated that Lubrizol ranked first, followed by Infineum, Chevron Oronite and Afton Chemical. Trailing were Lanxess, BASF and all other lubricant additive suppliers. The “all other” category included – among others – Evonik, Elco, King Industries, Croda, Eni, Tianhe, Sanyo, R.T. Vanderbilt, Wuxi South and DOG Chemie.

“Global Lubricant Additives: Market Analysis and Opportunities” is the name of the study.

Related Topics

Additive Components    Additives