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Poly Alpha Olefins (PAO) market Future Challenges and Industry Growth Outlook 2024

Author : Rahul Varpe | Published Date : 2019-03-18 

Poly Alpha Olefins (PAO) market size is likely to witness a strong growth as market demand is showing gains over foreseeable timeframe owing to demand rise of synthetic lubricants, greases, industrial oils, hydraulic fluids. Poly Alpha Olefin(PAO) benefits over wear & tear protection, load carrying capacity and thermal stability compared to conventional lubricants are driving factors to propel PAO market growth over forecast period.

Poly Alpha Olefin (PAO) are lubricants with composition of hydrogen and lithium soap. It’s a colourless liquid having molecules with predetermined chain length which are manufactured by catalytic polymerization of linear alpha olefins. Demand for poly alpha olefin in synthetic lubricant application is to rise as increase in offshore drilling activities coupled with growing automotive industry should boost product demand. 

Poly Alpha Olefin (PAO) in market of synthetic lubricants holds major market share compared to alternatives namely Esters, PAG and Group III (Hydro Cracking). Owing to its physical & chemical properties like high viscosity index, lower pour point, low volatility, and better thermal stability, PAO should drive industry growth during the projected timeframe.

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Automotive OEM’s are also recognising benefits of Poly Alpha Olefins (PAO) in terms of improving engine efficiency and reducing emissions contributing in its growing automobile applications. Major factors for suitability of PAO’s in automobile industry include controlled structure, absence of lighter & more volatile (small) hydrocarbons results in lower volatility, less hydrocarbon tailpipe emissions and raise in a flash point anticipating to propel poly alpha olefins market size.

Poly Alpha Olefin(PAO) are extensively used in combination with lower viscosity fluids like mineral oils, to achieve wide range of industrial lubricants and greases which can be used under severe operating conditions stimulating its demand. It forms a very non-polar base oil with a high viscosity index (of approximately 130), excellent low-temperature flow and pour-point characteristics because of the absence of ring structures, double bonds, sulphur, nitrogen components or waxy hydrocarbons.

POA based biodegradable hydraulic fluids are also gaining the global importance encouraging its utilisation in regional industries. Stringent regulations in Europe pertaining to use of biodegradable oils under the policies of White Swan Scheme and Blue Angel Scheme, supports consumption of biodegradable oils, and anticipates to drive demand in regional industry.

North America driven by Canada and the U.S., POA market accounted 30% and above of global revenue and is anticipated to register significant gains. Rise of shale oil & gas production in the region owing to advent of extraction technology, ethylene production is anticipated to increase, indirectly fuelling Poly Alpha Olefin (PAO) market demand during forecast period as ethylene being essential raw material in Poly Alpha Olefin (PAO) production.

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Europe driven by U.K., France, and Germany, is anticipated to grow steadily followed by North America, up to 2024. Growth in Europe can be attributed to regulations regarding use of biodegradable oils, White Swan Scheme and Blue Angel Scheme, respectively. The policy promotes consumption of oils with biodegradable base, leading to increasing opportunities for regional industry growth.

Asia Pacific driven by India, Japan and China, Poly Alpha Olefin (PAO) market size may grow significantly over the forecast period. Asia Pacific accounted for over 12% of the total market volume in 2015 and is estimated to be fastest growing regional market owing to rapidly driven automotive and OEM industry which is experiencing a shift from mineral to synthetic based lubricants.

Ensuring continuous raw material supply for alpha olefins production in Russia and the U.S. and increase in oil production in OPEC countries along with volatile nature of raw material prices will remain a key challenge for industry participants.

 Global Poly Alpha Olefin (PAO) market share is moderately fragmented with major players operating in this market include Shell Chemicals, Q-Chem., Chevron Phillips and Sasol. The companies plan to expand its production and reach through integration and by owning patented technologies to propel industry competitiveness. These industry players also integrate their operations over a value chain which includes raw materials production as well as supply and final products. Other participants include ExxonMobil Corp., INEOS Oligomers and Chevron Phillips a Chemical Company LP along with own patented technologies for poly alpha olefin production.

About Author

Rahul Varpe

Rahul Varpe

Rahul Varpe currently writes for fractovia. A communication Engineering graduate by education, Rahul started his journey in as a freelancer writer along with regular jobs. Rahul has a prior experience in writing as well as marketing of services and products online. Apart from being an avid reader, his other hobbies include music and sketching. He can be contacted at- [email protected] | https://twitter.com/varperahul

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