Two consultancies recently presented a wealth of evidence forecasting continued growth in demand and revenue from marine lubricants is on the horizon and suggesting that suppliers may increasingly want to set sails toward the East.
The global marine lubes market is expected to push forward at a steady compound annual growth rate of 4.1 percent through 2024, according to a report published last week by United States-based consultancy Transparency Market Research. During that period, revenue from marine lube sales will expand by U.S. $1 billion to $3.3 billion.
Given the regions vast pool of ports, its no wonder that the Asia-Pacific region demanded more lubricants for stern tubes, turbines and vessel engines than any other area worldwide last year. Demand will continue picking up on that side of the globe during the forecast period, driven by an increase in marine activities in Australia, the Philippines, Indonesia, Singapore, India, Japan and China.
Rising reliance between nations globally is impelling marine shipments and marine transportation, which are expected to propel the global [marine lubricants] market, TMR noted. Increasing ocean fish farming and offshore waterways transportation is also likely to bode well for the market.
Asia accounted for around 89 percent of the worlds aquaculture fisheries in 2014, a Food and Agriculture Organization of the United Nations study found last year. Approximately 4.6 million fishing vessels sailed the seven seas, and a staggering 3.5 million of them – or 75 percent of the worlds fleet – anchored in Asia. China remains by far the worlds major producer of fish for human consumption, the agency said, but its dominance has dipped from 65 percent to 62 percent in the past two decades, giving way to other countries in the region.
Photo: Kovalenko/Fotolia
Lubricants required for offshore support vessels, drilling rigs and FPSO (floating production storage and offloading) units represent a specific segment of the market that will continue booming in coming years. Offshore lubricants were the subject of a Technavio report this month, in which the United Kingdom-based research firm predicted that that group of products will grow by a rate of nearly 4 percent compounded annually in the next five years.
Asia dominated the offshore lubricants market in 2016 with a share of 32 percent, Technavio found. By 2021, the segment will be worth $63 million globally, up around 21 percent from its current valuation. Most of that growth will be sparked by an increase in offshore oil exploration, extraction and production activities – particularly by emerging economies.
The expected expansion of the offshore oil extraction and production activities in India, China, Singapore, and South Korea will also positively affect the market during the forecast period, Technavio reported. Many [suppliers] of offshore lubricants are shifting their manufacturing operations to these countries owing to the availability of raw materials, cheap labor, low transportation costs and less stringent government norms.
The lure of offshore oil will foster a foundation for growth in marine lubricants supply, said Technavios Hitesh Bhatia. The growing offshore activities owing to the rise in consumption of oil and gas will drive the demand for offshore lubricants, and subsequently, will foster the growth of the global offshore lubricants market in the coming five years, explained Bhatia, the lead analyst for Technavios specialty chemicalsresearch division.
Another driver of marine lubes demand in the region is less rosy – that of increased nautical military activity. The complicated geopolitical situation between India and China in the South China Sea [for example], has stimulated the naval activities in this region, thus providing lucrative opportunities to the marine lubricants market, the TMRreport pointed out. Furthermore, advancements in naval operations [from players in] North America are expected to benefit the market for marine lubricants.