Construction Lubricants Market - Forecast(2023 - 2028)

Construction Lubricants Market Overview

The Construction Lubricants Market size is estimated to reach US$16.9 by 2027, after growing at a CAGR of 4.6% during the forecast period 2022-2027. Construction lubricants are used to reduce friction between moving parts or surfaces and to improve the efficiency of construction machines and it includes hydraulic fluid, automatic transmission fluid, compressor oil, grease and engine oil. Lubricants are used to reduce friction in construction equipment such as bulldozers, dump trucks, draglines, scrapers and shovels and other heavy machinery. The global expansion of the construction sector is one of the primary reasons driving the growth of the construction lubricants market. The rising need for high-quality lubricants in a variety of construction activities, as well as the growing popularity of synthetic oil-based lubricants due to advantageous qualities such as water solubility, are driving the market growth. The covid-19 pandemic majorly impacted the construction lubricants market due to restricted production, supply chain disruption, logistics restrictions and a fall in demand. However, with robust growth and flourishing applications across major construction industries the construction lubricants industry is anticipated to grow rapidly during the forecast period.

Construction Lubricants Market Report Coverage

The “Construction Lubricants Market Report – Forecast (2022-2027)” by IndustryARC, covers an in-depth analysis of the following segments in the construction lubricants industry.

Key Takeaways

• The Asia-Pacific region dominates the Construction Lubricants market size, owing to the region's high economic growth rate and high investment in the construction industry.
• The expanding construction activities, as well as the upgrading of heavy machinery, are the primary driving factors influencing the construction lubricants market.
• However, technological developments are limiting market growth by reducing equipment size and lubricant consumption in the construction industry.

Figure: Asia-Pacific Construction Lubricants Market Revenue, 2021-2027 (US$ Billion)

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Construction Lubricants Market Segment Analysis – by Base Oil

Synthetic Oil held a significant share in the Construction Lubricants market share in 2021 and is forecasted to grow at a CAGR of 4.8% during the forecast period 2022-2027, owing to the extensive characteristics provided by synthetic oil over other base oil types such as mineral oil and bio-based oil. Synthetic oils are base oils and additives that improve an engine's overall performance. When compared to traditional mineral oil-based lubricants, synthetic oils offer improved performance, lower maintenance costs and address environmental concerns. As a result of the increased focus on emissions and expanding consumer awareness about the benefits of synthetic oils, there is a large demand for synthetic oils, which is contributing to the revenue growth of the global construction lubricants market size.

Construction Lubricants Market Segment Analysis – by Application

The Commercial held a significant share in the Construction Lubricants market share in 2021 and is forecasted to grow at a CAGR of 5.1% during the forecast period 2022-2027, owing to the significant use of construction lubricants in the commercial sector. Construction lubricants lower corrosion and friction while increasing the longevity of the machine's moveable elements. The commercial construction sector is expanding globally owing to a robust economy and solid market fundamentals for commercial real estate, as well as an increase in government initiatives for public works and institutional buildings. For Instance, Argentina has proposed a commercial building proposal of $428 million dollars. As part of the Plan Argentina Hace, the Ministry of Public Works said in January 2022 that it would invest ARS10.6 trillion ($91 billion) to complete 3,131 new infrastructure works and projects around the country. With the rise in commercial activities across the globe, the demand for construction lubricants is anticipated to rise for various applications, which is projected to boost the market growth in the commercial industry during the forecast period.

Construction Lubricants Market Segment Analysis – by Geography

The Asia-Pacific region held the largest share in the Construction Lubricants market share in 2021 up to 45%. The fueling demand and growth of construction lubricants in this region are influenced by flourishing demand from construction industries, along with fueling construction activities across APAC. The building and construction sector is growing rapidly in Asia-Pacific owing to a major development in infrastructural projects, emphasis on affordable housing units and modular building technology. According to the Department for Promotion of Industry and Internal Trade (DPIIT), In India, Between April 2000 and December 2021, foreign direct investment (FDI) in the construction development (townships, housing, built-up infrastructure and construction development projects) and construction (infrastructure) activity sectors totaled US$ 26.17 billion and US$ 26.30 billion, respectively. Infrastructure operations accounted for 13% of overall FDI inflows of US$ 81.72 billion in fiscal year 21. According to the International Trade Administration, the construction sector in China is projected to grow at an average of 8.6% from the year 2022 to 2030. Furthermore, the Make in India campaign by the Government of India plans to achieve infrastructural investment worth US$965.5 million by the year 2040. With the robust growth of the building and construction industry in Asia-Pacific, the demand for construction lubricants for equipment such as hydraulic fluid, engine oil, grease and others in construction will rise. Thus, with the high growth of construction lubricants in construction applications, it is anticipated that the demand for the construction lubricants industry will flourish during the forecast period.

Construction Lubricants Market Drivers

Government Initiatives Bolstering the Growth of the Commercial Sector:

Construction Lubricants reduce corrosion and friction while increasing the longevity of machine moveable parts, which drives the market growth of construction lubricants in the commercial industry. The demand for Construction Lubricants is rapidly growing as government investment in the commercial industry increases. For instance, Kansai International Airport in Japan will spend about 100 billion yen ($911 million) by 2025 to upgrade the larger terminal, to increase space for international flights at the country's No. 2 hub. The Indian Union Budget of February 2020 aims to build 100 new airports by 2024 as part of the Centre's Udan scheme to help with growing air traffic. The health facility revitalization component of the national health insurance indirect grant in South Africa has been allocated R4.6 billion over the medium term (2020-2021). A fraction of this budget will go toward the planning and construction of the Limpopo Central Hospital in Polokwane, which is set to open in 2025/26. The Ministry of Housing and Urban Development (MoHUA) has been given Rs 50,000 crore (US$6.8 billion) and a fund of Rs 25,300 crore (US$3.5 billion) has been set up to help complete stalled housing projects. The Indian government has launched a project called the “Pradhan Mantri Awas Yojana (PMAY) program”, which aims to provide affordable housing to all urban poor people by 2022 through financial assistance. With the robust growth of the commercial industry due to an increase in government initiatives, the demand for construction lubricants for equipment such as hydraulic fluid, engine oil, grease and others in construction will rise. Thus, with the high growth of construction lubricants in the commercial industry, it is anticipated that the demand for the construction lubricants industry will flourish during the forecast period.

Bolstering Growth of the Residential Industry:

Construction Lubricants have seen a huge increase in their use in residential areas. The residential industry uses a variety of equipment that require construction lubricants in order to eliminate breakdowns and reduce friction. Additionally, individuals are remodeling their homes in accordance with trends to improve their visual appeal of the same. Due to these comprehensive qualities and Urbanisation, the market for construction lubricants for the residential industry is growing. For instance, the Argentina government presents a US$428mn housing construction plan. According to the National Institute of Statistics and Censuses (INDEC), The value added by the residential industry increased by 37.1 percent in the first three quarters of 2021. Thus, with flourishing demand in the residential industry, the Argentina Architectural Coatings industry is driving and growing rapidly. According to Japan's Ministry of Land, Infrastructure, Transport and Tourism, the construction order for new houses rose to 32.3% in June 2021, compared to -13.4% in June 2020. Thus, with the high growth of construction lubricants in the residential industry, it is anticipated that the demand for the construction lubricants industry will flourish during the forecast period.

Construction Lubricants Market Challenge

Fluctuations in Crude Oil Prices

Fluctuations in crude oil prices continue to be one of the main challenges in the construction lubricants market. Construction lubricants are essentially petrochemicals derived from Brent crude oil. Rising crude oil prices cause raw material price volatility, posing substantial hurdles for manufacturers in the construction lubricants market. According to the BP Statistical Review of World Energy 2021 report, crude oil prices have fluctuated in recent years. For instance, the Brent crude oil price decreased from US$52.39/bbl in 2015 to US$43.73/bbl in 2016, then increased from US$54.19/bbl in 2017 to US$71.31/bbl in 2018 and then decreased to US$41.84/bbl in 2020. This results in a considerable increase in construction lubricant prices, which drives up manufacturing costs and reduces manufacturers' profit margins, thereby limiting the construction lubricants market growth.

Construction Lubricants Industry Outlook

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the construction lubricants market. The top 10 companies in the Construction Lubricants market are:

1. Royal Dutch Shell
2. ExxonMobil
3. BP
4. Chevron Corporation
5. Total
6. PetroChina
7. Sinopec
8. LUKOIL
9. Indian Oil Corporation
10. Fuchs Petrolub SE

Recent Developments

• In March 2022, BPCL, launched four new MAK lubrication products. Each product is intended to improve customer performance, dependability and durability
• In October 2021, Gulf Oil Lubricants India and Larsen & Toubro (L&T-CMB) partnered to launch a line of authentic oils to meet the unique and technologically advanced needs of the construction equipment industry.
• In January 2020, Total Energies announced capacity expansion of its lubricants blending operation in Dubai to meet rising lubricant demand in South Asia and the Middle East.

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