Canada Lubricants Market Outlook to 2028

Market Overview:

Canada's lubricants market is experiencing steady growth due to factors such as industrial development, transportation needs, and the automotive sector contribute to the demand for lubricants. The market size is also influenced by various industries, including automotive, manufacturing, construction, mining, and agriculture. The market is served by both domestic and international lubricant companies. Major global players like Shell and ExxonMobil operating in Canada alongside local manufacturers and distributors.

Lubricants in Canada are classified into various types such as engine oils, industrial oils, transmission fluids, hydraulic fluids, metalworking fluids, and greases. Each segment serves different applications and industries. Sustainability and environmental concerns are crucial trends emerging in the lubricants industry since there's a growing demand for eco-friendly lubricants that have minimal impact on the environment. Additionally, the shift towards synthetic and high-performance lubricants is notable, driven by the need for enhanced efficiency and durability in machinery and equipment. The lubricants market in Canada also faces challenges like intense competition, price fluctuations of crude oil and the need to keep up with technological advancements.

The lubricants market in Canada is a moderately consolidated market which consists of major players like Shell Corporation, Castrol, Fuchs, TotalEnergies etc. It has reached the maturity stage & is growing at a lower rate. Alongside these major players, there are other smaller & regional suppliers operating in Canada which focus on niche market & providing specialised services.

Canada Lubricants Market Analysis

• Inception of the Lubricants market in Canada can be traced back to 1930s by Shell and manufacturing company. Oil in Canada was first discovered in Ontario.
• Presently, the Canada Lubricants Market is at growth stage with establishment of many national and international companies such as ExxonMobil, Shell, Castrol, Valvoline and more.
• Canada's growing manufacturing and industrial sectors are driving the demand for industrial lubricants for machinery maintenance.
• Growing demand for specialized industrial lubricants tailored to specific applications in manufacturing, construction and mining.
• Synthetic lubricants are becoming popular due to their ability to withstand extreme temperatures and provide better efficiency.

Key Trends by Market Segment:

By Type of Lubricants: In 2023, Canada Lubricants market is segmented into Industrial & Automotive. The automotive segment dominates the market with a significant share in the segment. Automotive vehicles require regular maintenance which includes oil changes and lubrication of various components like engines, transmissions, and axles. The consistent demand for lubricants contributes to the dominance of the automotive segment in the market.

By Grade of Lubricants: In 2023, grade of lubricants in Canada is segmented into Mineral, Synthetic & Semi-Synthetic. The mineral segment dominates the segment with a significant share. Mineral-based lubricants are usually cheaper to produce compared to synthetic or semi-synthetic lubricants. This affordability makes them more accessible to a wider range of consumers, including individuals and businesses with budget constraints.

Competitive Landscape:

Major Players in Canada Lubricants Market

• The lubricants market in Canada has reached the maturity stage & faces tough competition from global giants like Shell & Castrol. Players are competing on diverse fronts like product, price & services.
• ExxonMobil, Shell and Petro-Canada collectively accounted for more than 60% of the total market share in Canada Lubricant Market
• ExxonMobil dominates with a 26% market share in Canada with its majority-owned 69.6% company, Imperial Oil Limited which is the nation's top petroleum refiner.
• Shell comes second after ExxonMobil which commands 25% of market share, recently reported 34% decline in earnings in 2023 from previous year.
• Apart from big giants like Mobil and Shell, Petro-Canada and Chevron command 15% and 7% of the market share due to their specialized lubricants for machinery and tailored to customer needs.

Recent Developments:

January 2022: With effect from April 1, ExxonMobil Corporation got organized in three business lines - ExxonMobil Upstream Company, ExxonMobil Product Solutions and ExxonMobil Low Carbon Solutions.

October 2021: Valvoline and Cummins have extended their long-standing marketing and technology collaboration agreement for another five years. Cummins’ responsibilities include endorsing and promoting Valvoline's Premium Blue engine oil for its heavy-duty diesel engines and generators to distribute Valvoline products through its global distribution networks.

June 2021: Total Energies and Stellantis group renewed their partnership for cooperation across different segments. Along with the renewal of partnerships with Peugeot, Citroën, and DS Automobiles, the new collaboration extends to Opel, and Vauxhall as well. This involves the development and innovation of lubricants, first-fill in Stellantis group vehicles, recommendation of Quartz lubricants, and shared usage of charging stations operated by Total Energies, among others.

Future Outlook:

• The market is expected to grow at a CAGR of 4.7% during 2023-2028 which is driven by increasing road motor vehicles and robust growth in the mining and construction sectors.
• Adoption of automation and Industry 4.0 principles in automated machinery, robotics, and smart manufacturing processes is expected to be seen & utilized in the lubricant industry.
• Growing demand for specialized industrial lubricants tailored to specific applications in manufacturing, mining and construction is expected to drive the demand of the market.
• Synthetic lubricants are expected to continue to gain popularity and secure more than 50% of the market share by 2028.
• Oil demand is expected to continue to expand over the period 2023 to 2028 in Canada to fulfill the consumption requirements of both industrial and automotive sectors by processing mineral oils into semi-synthetic and synthetic oils.
• The market is expected to witness enhancing use of synthetic lubricants over long term, because of growing awareness of people to switch to better quality lube oils for long term protection of the engines. Specialized EV fluids are expected to gain popularity with increasing EVs in the country.