US demand for lubricants is forecast to expand less than one percent annually to 2.5 billion gallons in 2018, valued at $27.5 billion. Although demand growth will be modest, this will represent a reversal of an outright drop in demand between 2008 and 2013. According to analyst Jason Carnovale of The Freedonia Group, “Growth will result from an improving economic climate and an acceleration in manufacturing activity, supported by relatively low natural gas prices and strength in key lubricant consuming industries.” Stronger gains will be held back by losses in the light vehicle market, where the long term trend of falling lubricant demand will continue. Improved efficiency and less frequent oil replacement will be a common trend not just in light vehicles but throughout lubricant markets, serving to prevent faster growth. Longer oil change intervals will result from the greater use of higher quality, better performing products, such as synthetics. However, growth will remain healthy in value terms as average prices benefit from this shift toward premium products. These and other trends are presented in Lubricants, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
Light vehicle lubricants will continue to hold a unique position in the market as both the largest segment and the one most visible to consumers. Improvements in vehicle technology and lubricant formulations will continue to be rapid, driven by an industrywide focus on improving fuel efficiency in cars and trucks. Better growth opportunities will exist in a number of other important markets. Construction spending is expected to continue a strong recovery through 2018, which will make construction among the fastest growing lubricant markets. The oil and gas industry, which has experienced rapid increases in drilling and exploration since 2006, will continue to provide rising demand for lubricants in oilfield and pipeline applications
According to the study, among product types, those seeing use in commercial and industrial markets, such as heavy duty diesel engine oils and gas turbine oils, will see the fastest growth. The impact of efficiency gains will be felt most strongly for products such as light vehicle engine oils and automatic transmission fluids, however, causing declines for these products. There will be opportunities in most markets for premium products which can offer improved lubrication, longer drain intervals, or increased environmental friendliness. Synthetic, re-refined, and bio-based oils will substantially outpace conventional petroleum lubricants. For example, despite declines in the overall light vehicle market, synthetic engine oils will post strong gains.
|
US LUBRICANT DEMAND
(million gallons)
|
|
% Annual Growth
|
|
Item
|
2008
|
2013
|
2018
|
2008-
2013
|
2013-
2018
|
|
|
|
|
|
|
|
|
Lubricant Demand
|
2455
|
2400
|
2460
|
-0.5
|
0.5
|
|
Engine Oils
|
1150
|
1125
|
1150
|
-0.4
|
0.4
|
|
Process Oils
|
460
|
455
|
470
|
-0.2
|
0.7
|
|
Transmission & Hydraulic Fluids
|
465
|
455
|
460
|
-0.4
|
0.2
|
|
Metalworking Fluids
|
148
|
141
|
145
|
-1.0
|
0.6
|
|
Other Lubricants
|
232
|
224
|
235
|
-0.7
|
1.0
|
|
|
|
|
|
|
|
© 2014 by The Freedonia Group, Inc.
Lubricants (published 03/2014, 385 pages) is available for $5200 from The Freedonia Group, Inc. For further details or to arrange an interview with the analyst, please contact Corinne Gangloff by phone 440.684.9600 or e-mail pr@freedoniagroup.com.
