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Compressor Oil Market Overview
Compressor Oil Market size is forecast to reach $9.8 billion by
2026, after growing at a CAGR of 6.2% during 2021-2026. Compressor oil offers
various properties such as viscosity, chemical stability, dielectric strength
& moisture, and others which are expected to grow the demand from end-use
industries. These oils are used for lubrication,
removal of heat, and for sealing. Additionally, polyalkylene glycol synthetic
oil is used in rotary screws and reciprocating compressors as it is either
water-soluble or oil-soluble. Thus, it is used as worm gear oils,
fire-resistant lubricants, metal-working fluids, and brake fluids due to their
various properties such as anti-oxidation, low volatility in high temperature,
biodegradable, eco-friendly, water solubility, and others. Hence, increasing
consumption of air compressors as they reduce re-lubrication and extended
compressor life is expected to emerge as the most significant growth driver for
the compressor oil market.
Covid-19 Impact
The COVID-19 pandemic has changed the
order of the supply chain of products. COVID-19 created change in the global
market due to the temporary closure of manufacturing plants. As well industries
chemical & petrochemical had closed their manufacturing plants. According to the American
Chemistry Council (ACC), total chemical production volume excluding
pharmaceuticals fell by 3% and basic chemical production fell by 1.3% in 2020. According to the US Energy Information
Administration (EIA), crude oil production fell by 8% in 2020 and is
expected to fall by 230,000 barrels per day (bpd) in 2021. Thus, the decline in production in these
industry hindered the consumption of compressor oil.
Report Coverage
The
report: “Compressor
Oil Market – Forecast (2021-2026)”, by Industry ARC, covers an in-depth
analysis of the following segments of the compressor oil industry.
Key Takeaways
- Asia-Pacific region dominated the compressor oil market, due to the high consumption of compressor oil in emerging and developing Asian countries such as India, China, Japan, Malaysia, South Korea, and others.
- Growing
demand for compressor oil as they help to reduce production cost in various
end-use industries such as chemical & petrochemical, oil & gas, and
others. According to the American Chemistry Council (ACC), in the United
States, chemical exports are expected to grow by US$ 134.5 billion in 2021.
- Increasing demand for synthetic lubricants as they have various properties such as anti-oxidation, excellent thermal stability, excellent viscosity index, and others is estimated to growing the compressor oil market size.
Figure: APAC Compressor Oil Market Revenue, 2020-2026 (US$ Billion)
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Compressor Oil Market Segment
Analysis – By Base Oil Type
The synthetic oil segment is projected to witness
the highest share of 53% in the compressor oil market in 2020 as it comes with excellent properties such as anti-oxidation
and thermal stability. Polyalphaolefins synthetic oil can contribute to an
extended service life of machine parts at a low cost. Synthetic oil
provides outstanding viscosity index, high flash point, low pour point, and
excellent hydrolytic stability, thus it is widely required in air compressors
especially vane and screw compressors. Furthermore, synthetic lubricant
improves the fuel efficiency of machine parts and reduced operating costs.
Hence, the consumption of synthetic base oil is estimated to influence the market
for compressor oil.
Compressor Oil Market Segment
Analysis – By Compressor Type
Positive displacement compressor type segment held
the largest share of 56% in the compressor oil market in 2020 as they have excellent operational efficiency. Positive
displacement compressors capture the volume of air in a chamber. They help to
reduce the volume of the chamber to compress the air. This type of compressor uses
vanes instead of helical blades on a rotor to compress air that enters the
cavity. Positive
displacement compressor uses a piston for air compression that moves
backward and forward. A rotary compressor is a very required positive
displacement air compressor type. It sucks air into the cylinder, then
closes the valve, and compresses the air with two rotors. These rotors rotate
regularly and run through the chamber. Compressor oils lower the
temperature of the operation during the mixture of air and oil. The maximum
output of a rotary compressor is mostly 600 horsepower and 1000 horsepower of
the reciprocating compressor. Hence, the growing demand for positive
displacement compressors is estimated to grow the consumption of compressor
oil.
Compressor Oil Market Segment
Analysis – By End-Use Industry
Chemical
& petrochemical sector held the largest share in the compressor oil market in
2020 and is growing at a CAGR of 3.6% during this forecast period of 2021-2026, as
compressor oil increases the service of machine, reduces operational cost &
power consumption during operation. Thus, the increasing chemical &
petrochemical industry is estimated to grow the consumption of compressor oil.
According to the American Chemistry Council (ACC), total chemical production
volume excluding pharmaceuticals is expected to grow by 3.9% in 2021 and 2.7%
in 2022. The basic chemicals production is projected to reach 5.05% in 2021 and
3.2% in 2022. Furthermore, according to the ACC, the total chemicals trade is
projected to grow by US$240 billion in 2021. Apart from this, according to the
U.S. Energy Information Administration, the total natural gas production is
projected to contribute 30% and more than 75% in Canada & Mexico,
respectively by 2040. Hence, all factors are estimated to grow the consumption
of compressor oil.
Compressor Oil Market Segment Analysis – By Geography
Asia
Pacific dominated the compressor oil market in 2020 with a share of more than 41%.
China and India are expected to witness high demand for compressor oil during
the forecast period, with the growing need from the oil & gas industry,
automotive industry, chemical & petrochemical industry, and others.
Compressor oils provide different advantages such as reduces energy
consumption, reduces operational cost, longer life, corrosion resistance,
synthetic solvency, and others. Thus, these lubricants are widely consumed by
end-use sectors. According to the U.S. Energy Information Administration, the
total natural gas production is projected to contribute more than 40% in China
by 2040.
As compressor oils are used in power transmission to machines and engines, so
the increasing automotive industry is also estimated to grow the consumption of
compressor oil. Additionally, according to the Association of Automobile
Manufacturers, China has become a world leader in the electric bus segment
which grows in production of electric buses at 34% by 2025. Furthermore,
according to the American Chemistry Council, industrial chemical production is
expected to boost 3.7% in 2021 and 3.5% in 2022. Hence, such factors are
estimated to grow the demand for compressor oil in the region.
Compressor Oil Market Drivers
Increasing Consumption of Compressor Oil from Automotive Industry
Compressor oil lubricants are used for inflating vehicles, cars, and
motorcycle tires. These air compressor oil used to transfer power to the
machine and engines. Compressor oil is used in the production cycle of the
automotive industry due to its ease of maintenance and reduction in operative
costs. Thus, increasing automotive
production is estimated to grow the consumption of compressor oil. According to the Australian Bureau of Statistics,
the Australian market sold 1.2 million new passenger cars, SUVs, and commercial
vehicles in 2017, an increase of 0.9 % from 2016. According to the
International Organization of Motor Vehicle Manufacturers (OICA), the
production of light commercial vehicles has increased in the APAC region by
10.2 % in 2018. Light commercial vehicle production has increased from
2,249,348 in 2018 to 2,254,153 in 2019, an increase of 0.2% in Europe. Furthermore,
according to Automotive Aftermarket Suppliers Association (AASA) and the Auto
Care Association, in China, light-duty aftermarket sales will grow from US$281
billion in 2020 to US$314 billion in 2021. Hence, such factors are
expected to grow the compressor oil market size.
Growing Demand for Positive Displacement Air Compressor
Positive air compressors
such as rotary compressors and reciprocating compressors are widely used as they require a low cost of production. The
positive air compressor has a high-pressure ratio, thus it is widely used in
refrigerators, chemical plants, automotive cylinders, and hydraulic cylinders.
Reciprocating positive displacement air compressors are designed for the double
or single chamber, as they use the piston for the constant movement of air in
the chamber. Apart from this, rotary compressor such as screw compressor has safety devices
that are fully packaged and pre-installed. Hence, as it reduce the production
cost, the demand for positive displacement air compressor is estimated to boost
from the chemical industry which, in turn, is expected to grow the compressor
oil market size.
Compressor Oil Market Challenges
Volatility in Raw Material Prices
Synthetic oils are typically
created from chemically modified materials such
as petroleum components but the base material is always
distilled crude oil. Although polyalphaolefin is produced through a
synthetic chemical process that originated from ethylene. Ethylene is produced
by cracking crude oil. Hence, fluctuation in crude oil prices may hamper market
growth. According to BP
static, Oil prices declined US$ 64.21/bbl in 2019 as compared with US$71.31/bbl
in 2018. According
to the U.S. Energy Information Administration (EIA), crude oil prices were
decreased by US$ 41.69 per barrel in 2020 compared to US$ 64.34 per barrel in
2019. Thus, volatility in raw material prices may hamper the compressor oil
market growth.
Compressor Oil Market Landscape
Technology
launches, acquisitions, and R&D activities are key strategies adopted by players
in the Compressor
Oil Market. Major players in
the Compressor
Oil Market are BASF, Dow Chemicals, Clariant, AkzoNobel, Hunstman
Corporation, ExxonMobil, Fuchs Lubricants, Royal Dutch Shell, Chevron, Total
S.A. and among others.
Acquisitions/Technology Launches
- On 19 November 2020, Mobil Pegasus launched Compressor Oil 264 and 460 to provide improvements in low-temperature performance, oxidation stability, and deposit control. Compressor Oil 264 and 460 should be used rather than an engine oil-type lubricant.