Market Challenges And Opportunities

Global Marine Lubricants Market Drivers:

Increasing seaborne trade: The growth in seaborne trade across the world is a key driver behind the increasing demand for marine lubricants globally. With over 80% of global trade being transported by sea, there has been a rise in shipping volumes and fleet size to support the growing transportation needs. According to data from the United Nations Conference on Trade and Development (UNCTAD), the total seaborne trade volumes crossed 11 Bn tons in 2021, growing at a rate of 4.3% from the previous year.

This surge in maritime trade volumes has directly resulted in larger shipping fleets. As estimated by UNCTAD, the global merchant fleet grew by 4.3% to 98,000 ships in 2022, compared to 2020 figures. With more ships plying the oceans every day, there is an accelerating requirement for special grade lubricants that can withstand tough marine conditions and ensure smooth operations of these vessels. Marine lubricants play a crucial role in reducing friction between machinery parts and the corrosion of engine components exposed to salt water. They aid in extending equipment life, improving fuel-economy, and minimizing maintenance downtime on ships.

Looking ahead, the demand trends are likely to strengthen further. According to forecasts by the United Nations Conference on Trade and Development, international seaborne trade is projected to increase by 3-4% per annum over the medium term until 2030. Multiple factors, such as rising globalization, increasing energy transportation, and the expansion of e-commerce are projected to sustain the growth momentum. This will translate to greater numbers of new ships delivered each year as shipping companies’ ramp up capacity. As fleet sizes increase, so will the consumption of marine lubricants across cruise ships, tankers, bulk carriers, and other vessel types. With larger requirements from the expanding maritime logistics industry, the global marine lubricants market is expected to grow steadily in the coming years.

Growth in the shipping industry: The shipping industry has been witnessing significant growth over the past few years, driven primarily by globalization and rise in international trade. As international commerce continues to accelerate with increasing globalization, there has been a substantial rise in seaborne trade volumes. Goods are increasingly being transported across borders via sea routes owing to their cost effectiveness as compared to other modes of transport. This surge in maritime logistics has led to a substantial expansion of the global commercial shipping fleet in recent times.

With large numbers of new cargo and passenger vessels being added to the worldwide shipping fleet each year to support the burgeoning trade flows, the demand for high-performance marine lubricants has risen tremendously. Marine lubricants play a vital role in ensuring smooth and efficient operations of the propulsion systems and other machinery on board ships. They help reduce friction and protect critical engine components from wear and tear caused by the harsh marine environment. The rigorous operational conditions at sea, varying climatic extremes, and stringent emission norms pose severe performance challenges for lubricants. This has driven shipping companies to rely on specialized bio-based and synthetic lubricant formulations that deliver enhanced lubricity and protect equipment better.

As per data from the United Nations Conference on Trade and Development (UNCTAD), the total number of container ships in the global fleet increased from around 6,000 vessels in 2015 to over 8,000 ships in 2021. Similarly, total dry bulk carrier fleet has grown from around 8,400 ships in 2015 to more than 11,500 vessels in 2021. This constant enhancement of international shipping capacity augurs well for the marine lubricant industry as it necessitates greater consumption of high-quality lubricants tailored for maritime applications. Lubricant manufacturers have also strengthened research and development efforts to formulate advanced lubricants compliant with the increasingly stringent emission regulations laid down by the International Maritime Organization (IMO). The marine lubricant market is expected to continue expanding steadily in the coming years on the back of robust growth projections for global seaborne trade volumes and international shipping infrastructure.

Global Marine Lubricants Market Opportunities:

Growing demand for bio-based marine lubricants: The growing demand for more environmentally friendly and sustainable marine lubricants presents a great opportunity for the global marine lubricants market. Bio-based and synthetic lubricants that are derived from renewable biological sources, like plant oils, offer several advantages over traditional petroleum-based lubricants. They are proven to be biodegradable and less toxic if released into the aquatic environment from ship operations or accidents. As environmental regulations steadily become more stringent worldwide, shipping companies are under increasing pressure to reduce pollution and carbon emissions from their fleets. This demand for greener solutions extends beyond just fuel choices to operational lubricants as well. Synthetic esters and bio-based formulations that are plant-oil derived are rapidly replacing conventional petroleum distillate oils that were previously the norm. According to the UN Conference on Trade and Development in 2020, an estimated 80% of global trade by volume is carried by ships, placing immense pressure on the marine industry to achieve ambitious emission reduction targets set by the International Maritime Organization.

The proliferation of international regulations incentivizing use of environmentally acceptable lubricants, spells opportunity for bio-based marine lubricant producers. EALs certified by organizations like the American Bureau of Shipping provide ship owners assurance of minimized impact on water quality and safety. Leading lubricant manufacturers have responded enthusiastically, developing a wide portfolio of bio-based and synthetic options targeting different engine and machinery applications. As per European Bio economy Statistics published in 2023, production of bio-based marine lubricants in Europe has grown by over 15% annually since 2020 pointing to sector-wide recognition of both regulatory compliance and marketing advantages offered by these greener solutions.

With ever-growing regulatory tailwinds and consumer preferences for sustainability, bio-based marine lubricants are set to capture a major share of the market in the coming years. Leading shipping firms and national navies have already begun pilot programs and commercial adoption will accelerate as supply chains strengthen to meet burgeoning demand for environmentally-preferable lubrication solutions. The global shift towards a low-carbon blue economy could not be a bigger opportunity for bio-based marine lubricant producers.

Advanced greases and fluids: Advanced greases and fluids present a significant opportunity in the global marine lubricants market. With increasing trade and transportation activities globally, the demand for vessels is rising rapidly. At the same time, regulatory bodies are enforcing stringent norms to reduce environmental pollution from ships. This is driving the need for advanced lubricants that improve fuel efficiency while meeting emission standards. Advanced greases help reduce friction between moving parts in the machinery on board ships and vessels. They are specially formulated to perform reliably under extreme pressures and temperatures encountered in marine engines and gears. Switching to high-performance greases can significantly reduce lubricant consumption and associated maintenance costs. They also facilitate longer service intervals by enhancing the load-carrying ability of lubricated components. Advanced lubricant fluids likewise aid fuel efficiency through improved viscosity control and antioxidant properties. This keeps engines clean from sludge and deposits that raise energy costs.

New product development is addressing technology and environmental sustainability together. Formulations with synthetic base oils and advanced additives can lower greenhouse gas emissions from ships by 2-3%. According to the International Maritime Organization, a drop of this magnitude would equivalent to taking over 10 million cars off the roads annually. Advanced lubricants thus play a key role in decarbonizing the shipping sector to meet emission targets for 2050 set by various countries and regulatory agencies like the European Union. This growing policy emphasis on green maritime operations will sustain demand for high-performance grease and oil technologies in both new builds and fleet modernization programs globally in the coming years.