Hydraulic Fluids Market

The global hydraulic fluids market size was estimated at USD 7.6 billion in 2021 and is anticipated to expand at a compound annual growth rate (CAGR) of 5.2% from 2022 to 2030. The growth of the market can be attributed to the increasing infrastructure and construction activities across the globe. Governments across developing nations are focusing on infrastructure development. Factors such as availability of finance, focus on operational resilience, deployment of new technologies, and the affordability of infrastructure are helping the rise in infrastructure activities. In 2020, due to the spread of Coronavirus, the market was affected in terms of production, distribution, and supply.

The prices of the base oils dropped severely due to the lack of supply and demand from the end-use industries such as automotive, construction, oil and gas, manufacturing, aerospace and defense, power, marine, etc. Restriction on material and people movement during the pandemic led to an abrupt halt in the functioning of the above industries. In 2022, the Russia-Ukraine war has further disrupted the supply chain of the hydraulic fluids market. Russia is one of the significant producers of base oil in the world. The cut down of base oil import from Russia by various countries has impacted the prices of hydraulic fluid drastically. Numerous companies have increased the prices of base oils by 15% compared to the previous years.

The hydraulic equipment market is changing at a rapid pace. In line with this, the lubricant industry has been changing to satisfy the reliability needs of hydraulic equipment as new technologies enable more efficient operation. The following are the important trends: Finer Filtration: Hydraulic pumps are susceptible to contamination because of the surroundings they work in. Thus, the fluids applied to lubricate them should be ultraclean. Original equipment manufacturers (OEMs) are responding by selecting improved filters that comply with ISO 4406 specifications. Minimizing Power Loss: today Hydraulic equipment places greater importance on reducing power losses and improving overall machine efficiency by lowering the number of joints, bends, and filter pressure differentials. Furthermore, OEMs are focusing on conserving as much energy as possible, and they are turning to energy-efficient hydraulic fluids to do so.

The mineral oil segment led the market for hydraulic fluids and accounted for 48.9% of the global revenue in 2021. Mineral oil is the most common base oil used for hydraulic fluid production and is categorized into three groups: Group I, Group II, and Group III. The mineral oil which is solvent-refined classifies within Group I. Group I base mineral oil is the most common base stock for modern hydraulic fluids. Other base stocks such as silicone oils or propylene glycol, can be required for certain purposes. Hydraulic fluids are given special qualities by adding additives. Anti-erosion additives, corrosion inhibitors, anti-foaming agents, and friction reducers are some common additives. Oils in Group II and Group III are hydrocracked type mineral oils, they have a higher viscosity than Group I. The industry would see a shift from Group I to II over the next few years as more factories that produce Group I oil convert to Group II or shut down.

The synthetic oil segment is expected to witness a CAGR of 5.9% over the forecast period in terms of revenue. Synthetic hydraulic oil was created to compensate for the drawbacks of mineral hydraulic oil. They have better performance than mineral hydraulic fluids because they are formed of chemically manufactured base oils. This type of oil is fire-resistant and therefore appropriate for high-temperature uses as it has outstanding lubrication properties and high viscosity index. The most common benefit of synthetic fluids is that they remain longer in service. In March 2022, BASF SE, a globally renowned company announced to increase its synthetic ester base stock’s production capacity at its Jinshan, China, facility. The investment is in response to the growing demand for high-performance lubricants in the Asia Pacific.

The construction segment dominated the market for hydraulic fluids and accounted for 25.3% of the global revenue in 2021. According to the Society of Tribologists and Lubrication Engineers (STLE), Hydraulic construction equipment makes up 76% of the hydraulic equipment market. Some of the popular construction hydraulic equipment that uses hydraulic fluids are excavators, backhoes, bulldozers, trenchers, loaders, dump trucks, graders, etc. Maintaining operational flow and end-activity amid often uncontrollable construction situations can be difficult. According to Valvoline, lubricants represent between 1 and 3% of the construction equipment’s maintenance budget. To achieve rigorous deadlines without jeopardizing the bottom line and profitability, construction machinery must stay reliable and available.

Asia Pacific dominated the market for hydraulic fluids and accounted for a revenue share of 36.3% in 2021. Major markets in the Asia Pacific are China, Japan, India, and Australia. Rising investments in manufacturing and construction, growth in the SME sector, and the emergence of new domestic and international players are some of the factors driving the demand for industrial lubricants in the region. Moreover, rising sales of passengers and commercial vehicles in the region and increased demand for synthetic lubricants are also supporting the growth of the market.

In Europe, the market for hydraulic fluids accounted for a revenue share of 24.2% in 2021. The major hydraulic fluid companies present in the region are Shell plc, BP p.l.c., TotalEnergies, and LUKOIL. Europe is one of the key regions for the construction and automotive industry. Demand for hydraulic fluids is expected high in the region over the forecast period. In 2020, the European Union imported prepared liquids for hydraulic transmission and hydraulic fluids for brakes that did not contain or contained less than 70% by weight of petroleum oils or bituminous mineral oils. The transaction was valued at USD 88,641.30 thousand.