Hydraulic Fluid Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global hydraulic fluid market is projected to register a CAGR of more than 2% during the forecast period (2021-2026).

The COVID-19 pandemic negatively affected the market for hydraulic fluids in 2020. During the pandemic, the manufacturing activities in various industries, such as automotive, aerospace, construction, oil and gas, and mining, were halted for a significantly long time. This, in turn, decreased the demand for hydraulic fluids in these industries. For instance, in 2020, automobile production witnessed a decline of 15.8% compared to 2019. However, the production in these sectors resumed in the second half of 2020, owing to the easing of lockdown regulations. This is an encouraging sign for the future of the market.

Key Highlights

• Over the medium term, the growth of the industrial sector in Asia-Pacific and Middle-East and Africa is projected to drive the market .
• On the other hand, the declining automotive industry and the impact of COVID-19 are likely to hinder the market in the coming years.
• The Asia-Pacific region is expected to dominate the market, with the largest consumption from countries such as India and China.

Key Market Trends

Decline in Automotive Industry to Impact the Market

• In the automobile industry, hydraulic fluids are used in applications such as brakes, clutches, and power steering systems. Brake fluids, clutch fluids, and power steering fluids are some of the forms of hydraulic fluid used in the automobile sector. These fluids help in creating force (transfer of kinetic or potential energy) and protect against wear on the surfaces in contact.
• These fluids need regular maintenance and need to be changed at regular intervals. This drives the demand for hydraulic oil from the aftermarket. For instance, if the quantity of the brake oil is lower than the required limit, the flow is disturbed, and the braking power is lowered.
• The global automotive industry has witnessed a downfall in recent times. According to the OICA, around 77.62 million vehicles were produced globally in 2020, compared to 92.18 million vehicles in 2019, registering a decline of about 15.8%.
• The decline is majorly attributed to the reduced production in major automotive hubs such as the United States, China, Japan, and Germany. In 2020, these countries witnessed year-on-year production declines of 19%, 2%, 17%, and 24%, respectively.
• Additionally, automobile sales have been witnessing a similar trend of production in the last few years. According to the OICA, sales fell from 90.42 million units in 2019 to 77.97 million units in 2020, registering a decline of around 13.8%.
• Hence, owing to the above-mentioned factors, the market is expected to witness a decline in growth during the forecast period.

Asia-Pacific to Dominate the Market

• The Asia-Pacific region is expected to dominate the market for hydraulic fluids during the forecast period. This trend is attributed to the growth of the industrial sector in the region, which is creating new opportunities for investment.
• In 2020, the Chinese construction industry was valued at about USD 1,049.2 billion. This sector is estimated to reach about USD 1,117.4 billion by 2021, registering a growth rate of around 6.5%.
• New construction projects in Japan occupied 127.55 million square meters in 2019. This reached around 113.74 million square meters in 2020, recording a decline rate of around 10.5%.
• Residential and commercial construction in India has been increasing, owing to the developing service sector in the country. According to the Ministry of Housing and Urban Affairs, the Indian government announced an investment of around USD 27.54 billion for the construction of 100 cities under the Smart Cities plan. This plan includes 5,151 different smart city projects. As of April 2021, 1,638 of these projects had been completed.
• The Chinese aerospace industry is one of the leading industries in the country, and the government is heavily investing to increase its domestic manufacturing capabilities. Moreover, through the next 20 years, the Chinese airline companies are planning to purchase around 7,690 new aircraft, valued at around USD 1.2 trillion.
• According to the OICA, Asia-Pacific dominated global automobile production in recent years. However, the decline in the automobile industry in the region has negatively affected the market. China is the largest producer of automobiles globally, with a production volume of 25.75 million vehicles in 2019. This reached 25.23 million vehicles in 2020, registering a decline rate of about 2%.
• Therefore, the aforementioned factors are expected to have a significant impact on the market in the coming years.

Competitive Landscape

The hydraulic fluid market is consolidated among the top few players. The top companies have been utilizing competitive strategies and investments to retain and expand their shares. The top five players in the market are Royal Dutch Shell PLC, Exxon Mobil Corporation, BP PLC, Chevron Corporation, and Total.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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