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Market analysis of oils and lubricants in India

Market analysis of oils and lubricants in India Market analysis of oils and lubricants in India
Release date 14.12.2021
Number of pages 62
Formats DOCX, PDF
Cost 250.000 ₹

The relevance of research

Lubricants are solid, plastic, liquid and gaseous substances used in friction units of automotive equipment, industrial machines and mechanisms, as well as in everyday life to reduce wear caused by friction. They come in various types and forms: mineral, organic, synthetic


Purpose of the study

Analysis of the state of the oils and lubricants market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the market of oils and lubricants


Content

Part 1. Overview of the Indian Oils and Lubricants Market

1.1. Main characteristics of the market
1.2. Dynamics of the market volume of oils and lubricants 2016-2020 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Stage of the life cycle of the oil and lubricants market
1.5. Competition from substitute products

Part 2. Competitive analysis in the market for oils and lubricants

2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players

Part 3. Analysis of the production of oils and lubricants

3.1. Volume and dynamics of domestic production of oils and lubricants
3.2. Share of exports in the production of oils and lubricants
3.3. Segmentation of the production of oils and lubricants by region
3.3.1. Production by Union Territories
3.3.2. Production by states of India

Part 4. Analysis of foreign trade supplies of oils and lubricants

4.1. The volume and dynamics of imports of oils and lubricants
4.2. Import structure
4.3. The volume and dynamics of exports of oils and lubricants
4.4. Export structure

Part 5. Analysis of the consumption of oils and lubricants

5.1. Dynamics of consumption of oils and lubricants
5.2. Analysis of the results of tenders for the purchase

Part 6. Price Analysis

6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India

Part 7. Assessment of factors of investment attractiveness of the market

Part 8. Forecast for the development of the market for oils and lubricants until 2025

Part 9. Recommendations and conclusions


Research excerpt

Part 1. Overview of the Indian Oils and Lubricants Market

1.1. Main characteristics of the market

Petroleum oils are liquid mixtures of high-boiling hydrocarbons, mainly alkylnaphthenic and alkylaromatic, obtained by oil refining.
In accordance with the scope of application, oils are divided into lubricating (motor, transmission, industrial, etc.) and special-purpose oils (turbine, electrical insulating, compressor, etc.).

Motor oils are those oils that are designed to lubricate reciprocating internal combustion engines. Motor oils consist of base oils and additives that improve their properties. The group of industrial oils combines those oils that are used in industrial production, for example, in machines for various purposes (weaving, turning, rolling, etc.).

Gear oils are base oils supplemented with functionally different additives. Gear oils differ from motor oils in properties designed for special operating conditions. They are used in friction units of mechanical, hydromechanical and hydrostatic transmission units of cars and trucks, buses, tractors, diesel locomotives, road construction and other machines, as well as in various gear reducers and worm gears of industrial equipment.

Hydraulic oils, or they are also called working fluids for hydraulic systems, are produced on the basis of well-refined base oils. Functional additives are added to base oils to improve functional properties. Hydraulic oils, in turn, are used for aircraft, mobile ground, river and marine equipment; for hydraulic brake and shock absorber devices of various machines; for hydraulic drives, hydraulic transmissions and circulating oil systems of various units, machines and mechanisms that make up the equipment of industrial enterprises. 

Compressor oils. A compressor is a type of mechanism that pressurizes a working fluid, usually air or another gas. The vast majority of compressors have moving parts (mechanisms). Therefore, almost all compressors require a special lubricant to cool, seal or lubricate internal parts and mechanisms.

Turbine oils are designed for lubrication and cooling of bearings of various turbine units: steam and gas turbines, hydraulic turbines, turbocompressor machines. The same oils are used as working fluids in control systems of turbine units, as well as in circulation and hydraulic systems of various industrial mechanisms.

Electrical insulating oils are liquid dielectrics and provide insulation for current-carrying parts of electrical equipment (transformers, capacitors, cables, etc.), serve as a heat-removing medium, and also contribute to the rapid extinguishing of an electric arc in circuit breakers. This group of oils includes transformer, capacitor and cable oils and oil for switches.

Other oils include:
▪ Technological oils (used in rolling, pressing, free forging, stamping of ferrous and non-ferrous metals),
▪ White oils for the food, perfumery and medical industries,
▪ Preservative oils,
▪ Shale, paraffin and printing ink oils,
▪ Plasticizer oils, fillers and carriers,
▪ Base oils.

Lubricants are solid, plastic, liquid and gaseous substances used in friction units of automotive equipment, industrial machines and mechanisms, as well as in everyday life to reduce wear caused by friction. They come in various types and forms: mineral, organic, synthetic. 
...
Diagram 1. The ratio of imported and domestic products in the market of oils and lubricants in 2016-2020, 

1.2. Dynamics of the market volume of oils and lubricants 2016-2020 Potential market capacity

Consider the dynamics of the market volume of oils and lubricants in India.
...

The structure of proceeds from the sale of oils and lubricants during the period under review was uneven, which was due both to the dynamics of production in the regions, the size and dynamics of imports and exports to and from federal districts, as well as average annual producer prices.

1.3. Assessment of factors affecting the market

Macroeconomic factors affect the dynamics of all sectors of the Indian economy, including the market for oils and lubricants. The main groups of factors are: economic, political, social and technological.

Economic

GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
...
The expert noted that the forecasts for the recovery of the Indian economy depend on the possible dynamics of the global economy and the development of the epidemiological situation.
Let's consider some experts' estimates of India's GDP dynamics forecast.
...

Industrial production index. This is an indicator of the dynamics of the volume of industrial production, its rise or fall, is defined as the ratio of the current volume of production in monetary terms to the volume of industrial production in the previous or other base year. This index characterizes the change in GDP due to the fundamental sectors of the economy: mining, manufacturing, production and distribution of electricity, gas and water.
...

Social Components 

Diagram 7. Population dynamics in India as of January 1, 2010-2021, million people, % 

...
Increasing level of urbanization. 
...
The migration influx to large cities leads to an increase in traffic flows in them, on the one hand, and an increase in the pace of industrial production, on the other. In both cases, this leads to an increase in the demand for oils and lubricants.

Technological components 

The volume of oil products production. 
...
Car park.
...

Political Components 

The tense political situation in interstate relations has a negative impact on all spheres of the Indian economy. 
The main activities of the state and the strategic tasks at present are the development of new models of cooperation with the US and the EU and the approval of India in the world monetary system. Anti-India sanctions and the generally sharp deterioration in relations between Western countries and India largely determine India's foreign policy. 

Credit policy. 
...
We combine all these factors in the form of a STEP analysis.

Table 7. STEP analysis of factors affecting the market for oils and lubricants

According to the results of the performed STEP-analysis, macro-environmental factors have a positive effect of weak force on the oil and lubricants market. All groups of factors have a multi-vector influence on the development of the market. 

Market development is constrained by: the dynamics of the dollar, the decline in real incomes of the population, the tense foreign policy situation, the decline in population, the dynamics of fuel and electricity prices, the dynamics of the electric car fleet, the negative dynamics of oil production.

The credit policy, the urbanization of the population, GDP recovery in 2021, the dynamics of the total car fleet in India, the depth of oil refining, the positive dynamics of the IPP in 2021, etc. have a positive impact on the market. 

1.4. Stage of the life cycle of the oil and lubricants market

The oil and lubricants market in India is at the stage of early maturity (saturation) of the product life cycle: 
– The volume of demand is not yet at its maximum, but in the medium term it will stabilize and become saturated;
– Enterprises try to satisfy all possible needs;
- The product has already achieved acceptance by the majority of potential buyers, it has long moved from the category of novelties to the category of standard ones;
- The goods are produced in large quantities according to proven technology with good quality;
– The competition in the field of prices becomes sharper, original developments of competitors appear.
...

It is at this stage that the likelihood of repeated technological improvement or modification of the product is most effective. The main task of the enterprise at this stage is to maintain and, if possible, expand its market share and achieve a sustainable advantage over direct competitors. At the moment, various marketing activities, mass and intensive advertising, price offers will be effective.

1.5. Competition from substitute products

Oils and lubricants are substances that have a lubricating effect. Mandatory use for lubrication of rubbing parts of machines and devices.
And if in everyday life it is possible to use other products for temporary lubrication of parts, then in production (in machine tools, units and other equipment), in transport, there are no products-substitutes for oils and lubricants.

It should be remembered that each of the hundreds of industrial lubricants contains additives blended specifically for a particular application. It is the use of an unsuitable lubricant that can cause the failure of mechanisms, while the use of a lubricant that has the necessary qualities helps to increase the efficiency of the mechanism or machine and extend its service life.

Part 2. Competitive analysis in the market for oils and lubricants 

2.1. Major players in the market 
...

2.2. Market shares of the largest competitors 

Market shares among the leaders in the oils and lubricants market in 2020 were distributed as follows: ...
...

2.3. Profiles of major players

...
XXX
...
XXX
...
XXX
...

Part 3. Analysis of the production of oils and lubricants

3.1. Volume and dynamics of domestic production of oils and lubricants

Diagram 16. Dynamics of production volumes of oils and lubricants in India for 2016-2020, thousand tons

The dynamics of the production of oils and lubricants from 2014 to 2020 is almost linear - the indicator is growing every year.
...
The dynamics of production in each year of the period under review is due to a combination of factors: domestic demand, demand for products in foreign markets, as well as a trend towards an increase in the range of manufactured goods. 
...

3.2. Share of exports in the production of oils and lubricants

According to the calculation data, if we consider the period from 2016, then an increasing part of the oils and lubricants produced in the country goes to domestic consumption. 
...

3.3. Segmentation of the production of oils and lubricants by region
...
3.3.1. Production by Union Territories

Table 10. Dynamics of the production of oils and lubricants in India by union territories in 2016-2020, thousand tons

The leading regions for the production of oils and lubricants in India are ...

3.3.2. Production by states of India

The distribution of oils and lubricants production volumes by states of India is determined by the geographical location of the refineries of the main holdings represented in the industry.
...

Part 4. Analysis of foreign trade supplies of oils and lubricants

4.1. The volume and dynamics of imports of oils and lubricants
...
4.2. Import structure
...
4.3. The volume and dynamics of exports of oils and lubricants

Diagram 21. Dynamics of exports of oils and lubricants in physical terms in 2014-2020, thousand tons

The dynamics of exports in physical terms has a spasmodic character ...
...

Diagram 23. Balance of exports and imports in 2014-2020, thousand tons

Traditionally, the trade balance in the oils and lubricants market is positive - exports exceed imports.

4.4. Export structure

The diagram shows the exporting countries that accounted for at least 1,0% in the structure of exports of oils and lubricants from India in 2020.
...

Part 5. Analysis of the consumption of oils and lubricants

5.1. Dynamics of consumption of oils and lubricants

The per capita consumption indicator is calculated by GidMarket from the ratio of the market size in producer prices to the population of India in the corresponding years.

5.2. Analysis of the results of tenders for the purchase

According to the UIS in the field of procurement and IS Fira.Pro, for the period from November 1, 2020 to October 31, 2021, more than 44 thousand contracts were concluded in accordance with Federal Law No. 2,8, including oils or lubricants in the subject of purchase. 
... 
An analysis of information on contracts under FZ-44 for the supply of oils and lubricants showed that:
- The list of products purchased at the tender, in addition to oils and lubricants, very often includes other goods: building materials, other fluids for vehicles and mechanisms - brake, cooling, windshield washer, etc. 
...

Part 6. Price Analysis

6.1. Average producer prices by union territories
...
Differences in average prices between districts, as well as by years of production, depend on a combination of factors: inflation, the range of goods produced, the pricing policy of enterprises, etc.

6.2. Average consumer prices by states in India

To conduct a comparative analysis of consumer prices in the states of India, a conditional package of 4 liter motor oil was taken with an average cost of 2000 Rs in India. in 2020.
...

Such a spread of prices in the regions is due to different reasons for each of them: the level of wages (and, accordingly, the purchasing power of the population), markup levels, the proximity or remoteness of the region from the central part of India, producer and importer prices, transport costs, etc.

Part 7. Assessment of factors of investment attractiveness of the market

...
The positive factors of the investment climate of the market dominate over the negative ones. 
...
The most significant positive factors.
... 
The most significant negative factors. 
... 

Part 8. Forecast for the development of the market for oils and lubricants until 2025 

We will analyze the market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
Further development of the oil and lubricants market in India will to a certain extent depend on the general economic condition of the state. According to the forecast of the Ministry of Economic Development of India for the medium term: ...
...

Part 9. Recommendations and conclusions 

The relevance of the market for oils and lubricants is due to their widespread use both at enterprises and by the population.
...
Market companies are recommended to: 
...
The success of the activity in the market also depends on a competent personnel policy, especially with regard to specialized specialists, as well as an effective assortment policy, since a wide range of products allows you to more or less level out surges in demand from different consumer segments.

In the conditions of overcoming the next economic crisis, these recommendations are supplemented by the need to retain the existing customer base by following a customer-oriented strategy with an emphasis on a flexible offer in terms of prices, assortment, convenient delivery and payment terms.


Diagrams

Diagram 1. The ratio of imported and domestic products in the market of oils and lubricants in 2016-2020,%
Diagram 2. Dynamics of the market volume of oils and lubricants, 2016-2020, thousand tons
Diagram 3. Revenue (net) from the sale of oils and lubricants by union territories for 2016-2020, %
Diagram 4. Dynamics of India's GDP, 2007-2020, % to the previous year
Chart 5. Monthly dynamics of the US dollar against the rupee, 2015-2021 (Jan-Aug.), Rs. for 1 US dollar
Diagram 6. Dynamics of India's IPP in 2014 - 2021 (Jan.-Sep.), % to the previous year
Diagram 7. Population dynamics in India as of January 1, 2010-2021, million people, %
Diagram 8. Population forecast in India for the period 2021-2024, million people
Diagram 9. Dynamics of real incomes of the population of India, 2011 - 2020, 2021 (Q1 and Q2), % to the previous year
Diagram 10. Dynamics of crude oil production in India, 2013-2020, million tons
Diagram 11. Dynamics of the fleet of electric vehicles in India in 2016-2020 (at the end of the year), thousand pieces
Diagram 12. Dynamics of oil refining depth in 2011-2020, %
Chart 13. Dynamics of the average interest rate on loans, 2015-2021 (Jan-Jun), %
Figure 14. Stage of the life cycle of the oils and lubricants market
Diagram 15. Shares of the largest competitors in the oils and lubricants market in 2020, %
Diagram 16. Dynamics of production volumes of oils and lubricants in India for 2016-2020, thousand tons
Diagram 17. Dynamics of the total revenue of the largest producers (TOP-5) of oils and lubricants in India, 2016-2020, billion Rs.
Diagram 18. The share of exports in production for 2014-2020, %
Diagram 19. Volume and dynamics of imports of oils and lubricants in physical terms in 2014-2020, thousand tons
Diagram 20. Volume and dynamics of imports of oils and lubricants in monetary terms in 2014-2020, units rev.
Diagram 21. Dynamics of exports of oils and lubricants in physical terms in 2014-2020, thousand tons
Diagram 22. Dynamics of exports of oils and lubricants in monetary terms in 2014-2020, units rev.
Diagram 23. Balance of exports and imports in 2014-2020, thousand tons
Chart 24. Structure of exports by countries in 2020, %
Diagram 25. Dynamics of consumption of oils and lubricants in monetary terms, 2016-2020, Rs./person
Diagram 26. Distribution of the number of purchases containing the subject ""oils, lubricants"" in India depending on the type of procurement procedure (by the number of purchases) in the period from November 1, 2020 to October 31, 2021,%
Diagram 27. Forecast of market volume in 2021-2025, thousand tons


Tables 

Table 1. Forecasts of various sources for real GDP in India in 2021-2023 (data for June-September 2021), %
Table 2. Average producer prices and CPI for selected types of industrial goods in India at the end of the period in 2017-2021 (January-July), rupees per unit, %
Table 3. Urban and rural population in India in 2014-2020 (as of January 1), million people, %
Table 4. Dynamics of the car park in India in 2014-2020 (at the end of the year), thousand pieces
Table 5. Weighted average interest rates of credit institutions on credit operations in rupees, excluding PJSC Sberbank (% per annum), 2015-2021 (Jan-Jun)
Table 6. GOSTs for oils and lubricants
Table 7. STEP-analysis of factors influencing the market of oils and lubricants
Table 8. Main companies participating in the oils and lubricants market in 2020
Table 9. Profiles of companies participating in the oils and lubricants market in 2020
Table 10. Dynamics of the production of oils and lubricants in India by union territories in 2016-2020, thousand tons
Table 11. Structure of imports of oils and lubricants by importing countries in 2020, units rev.
Table 12. Tenders for the purchase of oils and lubricants, for which contracts were concluded under the Federal Law-44 in the period from 01.11.2020/31.10.2021/5 to / / , in the amount of more than million Rs.
Table 13. Average producer prices in the market for oils and lubricants across the Union Territories in 2016-2020, Rs./t
Table 14. Average consumer prices in the market of oils and lubricants by states of India in 2020, Rs./pack 4l
Table 15. Assessment of factors of investment attractiveness of the oils and lubricants market
Table 16. Forecast indicators of the development of the Indian economy in 2021-2024 (base case), %


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