Synthetic Industrial Gear Oil Market Trends, Industry | 2031

Report Description

Synthetic Industrial Gear Oil Market Outlook 2031

The Global Synthetic Industrial Gear Oil Market size was USD 2,477.5 Million in 2022 and is anticipated to reach USD 3,927.6 Million by 2031, expanding at a CAGR of 5.4% during the forecast period, 2023 to 2031. Industrial gear oil is a liquid lubricant that is used in gears (gearboxes) to protect surfaces, reduce friction of the gear parts, remove heat produced by the operating gear, and protect the gear parts from corrosion.

Industrial gear oil is strengthened with the carefully chosen base material and other additions, and is formulated from highly refined base stocks. Base oil and additives are two essential components of gear oil. Gear oil additives are added to enhance the desired qualities of gear oil, such as extending machine lifespan and wear & tear capabilities, while reducing unnecessary qualities.

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Highly viscous gear oil typically contains organosulfur compounds. It also guards the gear parts against corrosion while dissipating the heat produced by the moving gear. These gear oils are commonly found in heavy machinery, such as conveyor belts, agricultural machines, and other industrial machines. The primary function of industrial gear oil is to reduce friction and wear between the moving parts of the gear systems.

Macro-economic Factors

Export and Import

According to OEC World Estimates, in 2022, the top importers of lubricating products with approximate share were China (18%), Germany (7%), Mexico (3.5%), the US (3.35%), and India (3.2%). On the other hand, considering the price of oil over the past decade, the value of lubricant exports has also changed significantly. In 2022, the top exporters of lubricating products were Germany (22%), the US (15%), Japan (12%), France (8.6%), and the Netherlands (5.4%).

The trade relations between the US, China, and India play a crucial role in the overall synthetic industrial gear oil market. These are the major three countries across the globe by gross national product (GDP) and purchasing power parity (PPP). These are in the top five countries across the globe in 2021 by nominal GDP. Thus, the overall regional demand and export-import tariffs affect the price of synthetic gear oil significantly.

Technological Advancements

The demand for advanced and expensive gear oil is increasing, due to technological advancements in automobile hardware design. Industrial gear oil demand is stimulated by a number of sectors, including the automotive, power, and general manufacturing. It is also correlated with rising economic activity. The requirement for synthetic gear oils is growing exponentially with rising net sales of vehicles across the globe.

Moreover, the rising inclination of people towards electric vehicles (EVs) is another major macroeconomic factor affecting the market. The long-term demand for internal combustion engines (ICE) is expected to expand in the coming years, as the EV market expands. EVs require transmission fluids, greases, and coolants. Thus, technological factors have an impact on the overall market dynamics.

Synthetic Industrial Gear Oil Market Dynamics

Market Driver- Growing Evaluation of Wind Energy

The generating capacity and turbine size of wind turbines is increasing, thus driving the competitiveness of wind power by reducing the levelized cost of electricity. However, more power generation puts more stress on gearboxes and bearings, and more stress on the lubricants needed to protect the equipment.

Surging need for long-life gear oils that minimize maintenance and improve equipment life and reliability, which in turn, drives the demand for synthetic industrial gear oils. Synthetic industrial gear oils containing polyalphaolefins (PAO) are used in wind turbine gearboxes to maintain low operating temperatures for extended periods of time compared to traditional mineral-based industrial gear oils.

The need for wind power has steadily grown to be one of the most powerful sources of electricity generation in the US over the past 30 years. According to the US Energy Information Administration, the cost of wind power continues to fall, but incentives for wind power through production tax credits (PTCs) and other programs have made it significantly competitive with fossil fuels.

Total wind power generation in the US reached 380 billion kWh in 2021, and by 2022 wind turbines are likely to account for about 10.2% of the country’s total utility-sized power generation and that share is set to increase in the coming years, as the US Government's current infrastructure plans pledges investment in wind energy. Closed gears are a key component of many wind turbine nacelles.

In order for these systems to operate at maximum efficiency, the gears must be lubricated with a suitable industrial gear oil (IGO) of suitable viscosity with suitable performance characteristics, which is driving the demand for synthetic industrial gear oils.

Market Driver- Growing demand from Marine Industry

Synthetic marine gear oil is specially formulated for all types of gears and bearings with enhanced protection against oxidation, hydrolysis, and rust. The marine industry uses synthetic gear oils to meet the needs of outboard motors and sterndrive units. It offers excellent protection against cold starts and operating temperatures, making gear selection and engagement easy and comfortable.

The shipping industry is changing. In addition to managing rising operating costs and achieving cost-effective environmental compliance, ship operators face big decisions. Decisions regarding fuels, technology, and whether their fleets and assets can be future-proofed, which drives the synthetic gear oil market.

Economic and population growth, resource needs, accelerating technological progress, and the rise of consumers and cities in key emerging markets are shaping the shipping industry’s future. As the marine industry grows, so does the demand for industrial gear oils for the maintenance of ships. Therefore, the demand for industrial gear oils is expected to increase due to the prosperity of the marine sector in various regions.

 Market Restraint- High Cost of the Synthetic Industrial Gear Oil

Synthetic industrial gear oils are not usually recommended by gear manufacturers for general gear applications due to high cost, limited availability, and lack of knowledge of their properties. Synthetic industrial gear oil cost approximately 3 times that for comparable conventional mineral oil-based lubricants. Depending on the type of base stock, the cost for a synthetic industrial gear oil can be three to 15 times the cost for the equivalent grade of mineral oil.

This is expected to hamper the market, as customers prefer inexpensive substitutes of synthetic industrial gear oil. Furthermore, synthetic industrial gear oil is a man-made lubricant that consists of artificially made chemical compounds. Synthetic oils are typically created from chemically modified materials such as petroleum components; however, the base material is almost always distilled crude oil.

The cost of petroleum compound and the amount of raw materials used in during the production process is always influenced by fluctuating crude oil prices, which further hampers the market.

Scope of The Synthetic Industrial Gear Oil Market Report

The report on the global Synthetic Industrial Gear Oil market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Synthetic Industrial Gear Oil Market Segment Insights

Based on type, the global Synthetic Industrial Gear Oil market is segmented polyalphaolefin (PAO), polyalkylene glycol (PAG), polyisobutylene (PIB), and others. The polyalphaolefin (PAO) segment held XX% of the market share in 2022 and is expected to hold XX% of the market share in 2031.

The demand for high-performance lubricants, which offer enhanced wear protection, improved fuel efficiency, and long service life, is driving the PAO segment. PAO is considered an ideal choice for high-performance lubricants, due to its excellent thermal & oxidative stability, low volatility, and low-temperature fluidity.

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Based on end-use, the global Synthetic Industrial Gear Oil market is segmented into General Industrial and Transportation. The General Industrial segment is further sub segmented into Energy & Power, Construction, Agriculture, Oil & Gas, Mining and Others. The Transportation segment is sub segmented into Automotive, Marine, Aviation, and Railway. The General Industrial segment held a XX% share of the market in 2022.

This segment is driving the market, due to the increasing benefits of using polyalphaolefin (PAOs) in the general industry. PAOs are commonly used synthetic-base oils in industrial lubricants. These are synthetic hydrocarbons (SHC) that imitate the best hydrocarbon structure found in mineral oils that are branched and not circular. These correct many drawbacks of using mineral oil lubricants.

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Regional Outlook

On the basis of regions, the global Synthetic Industrial Gear Oil market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Asia Pacific held XX% market share in 2022 owing to high industrial growth in the region.

Furthermore, Asia Pacific has become one of the key locations for foreign direct investments (FDI) in the manufacturing sector as a result of the stability of the economy over the last five years, the availability of skilled workforce, as well as the pro-business environment and growing infrastructure in the region.

The investment in Asia Pacific includes several facets, such as automobile hubs in Thailand and Indonesia, electrical and electronics clusters in Malaysia, food production and processing facilities in the Philippines, and manufacturing of petroleum and metals in Vietnam. Despite global geopolitical and economic pressure, greenfield investments in Asia Pacific have remained resilient, growing by 6% in 2022. Large FDIs in the region are concentrated in the metal/metal-based industries. All the above factors spur the demand for synthetic gear oil in the region.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the Global Synthetic Industrial Gear Oil Market

• Historical, Current, and Projected Market Size in terms of Value

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on Global Axial Fans Market Performance