A Brief Discussion on the Competitive Situation and Future Pattern of the Global Lubricant Market

I. Current Situation and Competitive Landscape of the Global Lubricant Market

Market size and growth momentum

The global lubricant market size was approximately 160 billion US dollars in 2023, with a compound annual growth rate of about 3.5% over the next five years, mainly driven by industrialization in the Asia-Pacific, Middle East and Africa regions.

The proportion of automotive fuel is 45%, but the growth rate has slowed down (affected by electric vehicles). Industrial oil accounts for 55%, with strong demand (in mining, energy, and infrastructure expansion).

2. The competitive tiers are clearly differentiated

• The first echelon: European and American giants such as Shell, ExxonMobil and BP, which occupy more than 50% of the share, rely on brand, technological monopoly and global supply chain;

• The second echelon: Regional leaders such as Sinopec and Bharat Petroleum of India, seizing emerging markets with cost advantages;

The third tier: Emerging technology brands (such as TERZO), which enter niche markets through differentiated technologies.

3. Regional market characteristics

• Europe and America: Demand is saturated, high-end synthetic oil dominates, and environmental protection regulations are strict (such as the EU Reach regulation);

• Asia-Pacific: The world's largest incremental market (accounting for 40% of demand), but with high price sensitivity;

• Middle East/Africa: The demand for industrial oil has soared, but the infrastructure is weak and it relies on imports.

Ii. Development Trends and Challenges in the Next Decade

Technological change reconfigures market logic

The impact of electrification: The increase in the penetration rate of electric vehicles will reduce the demand for automotive lubricants (expected to decrease by 15% by 2030), but special lubricants (such as battery coolant and reducer oil) will become new battlefields.

• Lubrication demands of Industry 4.0: Smart factories have given rise to high-performance and long-life industrial oils, which need to be compatible with IoT device monitoring and automated maintenance.

2. Environmental protection and sustainability dominate the competition

• Bio-based lubricants: The proportion may exceed 20% by 2030. Cargill and TotalEnergies have already made their plans.

Carbon tariffs force transformation: Enterprises need to prove their carbon reduction capabilities throughout the entire life cycle (for example, the TERZO hydrogen cracking process can reduce carbon emissions by 30%).

3. Geopolitics and Supply chain risks

The Russia-Ukraine conflict has exacerbated the fluctuations in base oil supply, and manufacturers need to establish diversified procurement networks (such as TERZO's layout of cooperation with refineries in the Middle East and Southeast Asia).

Iii. TERZO's Breakthrough Path: Differentiated Competition Strategy

1. Technological anchor point: Build a moat with "titanium-molybdenum technology + hydrogen cracking"

• Breakthrough in extreme scenarios: Strengthen the application of LTMD® liquid titanium-molybdenum technology in polar mining, desert heavy trucks and other scenarios, and form a differentiated competition with international giants;

• Electrification support: Develop low-conductivity battery cooling oil, conduct joint tests with the three-electricity suppliers of BYD and Tesla, and seize the right to speak in technical standards.

2. Regional Focus: Emerging Markets "encircle Cities from Rural areas"

• Southeast Asia: Build trust among small and medium-sized B-end users through TikTok educational content (such as "Mine Equipment Maintenance Guide"), and combine it with the "Shared Lubrication Service Station" light-asset model;

• Africa: Bundled with Chinese-funded infrastructure projects (such as the Mombasa-Nairobi Railway), providing a one-stop solution of "oil products + filter elements + testing".

3. Digital Empowerment: The DTC model disrupts traditional channels

• Social e-commerce monetization: Launch the "AI Oil Diagnosis Tool" on Shopify. Users upload the equipment model and working conditions, and a lubrication plan is automatically generated and directly shipped to the product.

• Data-driven services: Utilize the TERZO Global Index to analyze regional demands and provide dynamic pricing suggestions for dealers (such as promoting hydraulic oil before the rainy season in Nigeria).

4. Taize's Sustainable Brand Narrative: From "Made in China" to "Global Responsibility"

• Green Certification: Apply for UL ECOLOGO and EU EELQMS certifications. The TERZO-ECO series packaging is marked with "1.2kg carbon reduction per liter".

• ESG Collaboration: Released the "Global Lubrication Carbon Reduction White Paper" and, in collaboration with UNIDO, provided free energy efficiency audits for factories in Southeast Asia.

Iv. Risks and Response Suggestions

1. Risk of technology plagiarism: Accelerate the global patent layout of LTMD® (already covering China, the United States and Europe), and independently produce core additives;

2. Geopolitical conflict risks: Building bonded warehouses in Vietnam and Mexico to diversify supply chain reliance;

3. Brand recognition shortcoming: Sponsored the Dakar Rally and the Berlin Industrial Exhibition, and implanted the label of "Extreme Condition Verification".

Conclusion

The competition in the global lubricant market has shifted from "scale expansion" to a three-dimensional battle of "technology + ecology". TERZO needs to be driven by three axes: "technological extremization, deep-rooted regionalization, and brand value enhancement" in order to open up a new growth pole in the narrow space between giants. In the next decade, the global breakthrough of Chinese lubricant brands may emerge from this strategic sample.