Re-Refined Base Oil Market to Reach USD 5.05 Billion by 2028, Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast 2023-2028 - Arizton

According to Arizton's latest research report, the re-refined base oil market growing at a CAGR of 6.82% during 2022-2028. The global re-refined base oil market was valued at USD 3.40 billion in 2022 and is expected to reach USD 5.05 billion by 2028, growing at a CAGR of 6.82% during the forecast period. The market to witness sale of approx.. 5.6 Million Tons of re-refined base oil by 2028.

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The re-refined base oil industry is evolving to cater to customers' changing needs and preferences. Over the years, climate change, increased environmental consciousness, and the pursuit of better performance by original equipment manufacturers (OEMs) resulted in the greater use of re-refined base stock. Re-refined base oil delivers high-quality base oil, and its processing is also environment friendly than refining base stock from crude oil. Unlike the base stock group, the re-refined process manufactures only Group I, Group II, and some amount of Group III base stock.

The market's growth is linked to the economy's performance in general. Therefore, vendors must diversify or expand the scope/scale of operations to negate recessionary trends in certain regions. The declined use of Group I re-refined base globally creates an opportunity for new players to enter the market with the latest technology and meet the increasing demand for Group II and III re-refined base oil across numerous markets, including the automotive, shipping, and industrial sectors. Early adopters of new technology are expected to have an advantage in the market. Vendors' production and sales facilities need to be geographically spread to counter the production cost and benefit in terms of regulations and taxation.

The Asia-Pacific (APAC) region, renowned as the most populated area globally, is now home to an astounding 4.7 billion individuals in 2023, representing approximately 22.54% of the world's total population. This demographic distinction is underscored by the presence of two of the world's most densely populated countries, China, and India, within the APAC region.

In the year 2022, China, a prominent APAC nation, dominated the market share with an impressive 35.14% stake, showcasing its substantial influence across various sectors.

While the adoption of re-refined base oil remains moderate in the APAC region, some countries, such as India, Australia, and Vietnam, rely heavily on imported base oil to meet their domestic requirements. To address this reliance, governments in these nations have initiated several proactive measures to foster the growth of re-refined base oil. Notable among these measures is the implementation of used oil collection laws in Vietnam and Australia.

Furthermore, the surging demand for lubricants, driven by the thriving automotive, construction, and robust industrial sectors, is providing significant support to the expansion of re-refined base oil within the region. These strategic endeavors by governments, coupled with the increasing lubricant consumption due to the flourishing automotive, construction, and industrial activities, are actively contributing to the growth of re-refined base oil in APAC.

Group II Re-refined Base Oil Market to Grow at a CAGR of approx. 8% during 2022-2028

Group II re-refined base oil leads the market, followed by Group I and Group III re-refined base oil. This dominance of Group II is attributed to its characteristics, such as low sulfur content, reduced volatility, and lower viscosities, making it the preferred choice for automotive and industrial lubricant manufacturers over Group I. Additionally, the growth of aviation, commercial road transport, mining activities, and food processing machinery is anticipated to drive the increasing demand for Group II re-refined base oil products. Group II re-refined base oil is projected to maintain its dominance and exhibit higher growth throughout the forecast period.

Refining Base Oil by Clay Treatment Technology is Leading the Revenue

In terms of revenue, clay treatment is the leading technology in the global re-refined base oil market, primarily used for producing Group I base oil. It is often employed as a final step in lubricant extraction following vacuum distillation. Clay treatment is typically well-suited for smaller plant capacities due to its lower capital investment requirements. Solvent extraction is anticipated to dominate the market during the forecast period, with a projected compound annual growth rate (CAGR) exceeding 7%. Solvent extraction remains the most widely used technology for formulating re-refined base stocks.

Automotive Industry to create Maximum Demand for Re-refined Base Oil Market

In 2022, automotive oil held the largest share in the global re-refined base oil market and is expected to maintain its dominance throughout the forecast period. Automotive engine oil caters to a wide spectrum of vehicles, ranging from light, medium, and heavy commercial vehicles to agricultural tractors, marine engines, commercial and passenger cars, and two- and three-wheelers. Automotive oil plays a pivotal role in ensuring operational efficiency by protecting metal surfaces from corrosion, reducing friction in moving parts, and cleaning the engine from sludge. Moreover, these oils contribute to extending the lifespan of automotive gears.

Industrial oil represents the second-largest sub-segment and is poised for continued growth, driven by its essential role in various industries. The increasing industrial activity in sectors such as food processing, textiles, aerospace, and oil fields on a global scale presents growth opportunities in the industrial oil segment.

Rapid industrialization in emerging economies, coupled with technological advancements in production units, fuels demand for industrial oil. Key industries in different countries, including energy, mining, and chemicals, are expected to further boost the demand for industrial oil across applications such as industrial engines, hydraulics, compressors, and centrifuges.

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This release was published on openPR.