Global finished lubricant demand, excluding process oils, is projected to reach 35.7 million tons in 2017 and 38.7 million tons in 2023 up from 33.5 million tons in 2013 according to research and consulting firm Klines "Global Synthetic Lubricants 2013 Market Analysis and Opportunities" which summarizes Klines fourth comprehensive analysis of the market for synthetic and semi-synthetic finished automotive and industrial lubricants. Of this, synthetics share of the 33.5 million metric ton global lubricants market in 2013 (excluding process oil) will grow to 18 percent of the 38.7 million tons of total lubricant demand in 2023, said Kline.
Total global finished lubricant demand, including process oils, is estimated at 39.2 MT in 2013, up 1% overall compared to 2012 with synthetic and semi-synthetic lubricants accounting for close to 13% of total demand Kline found in this recently completed study and presented in a webinar last month by George Morvey, industry manager for Klines energy practice,
Of the estimated at 39.2 MT in 2013 mentioned above, regionally, Asia Pacific, at 43%, consumes the greatest percentage of the global lubricants market, followed by North America at 25% and Europe at 17%. By application, HDEO, at 23% commands the greatest use of finished lubricants, followed by PCEO/MCO at 21% and PO (Process Oil) at 14%.
Morvey stated that the report is global and includes the major lubricant consuming regions, specifically Asia Pacific, North America, Europe, Africa-ME and South America, and their respective leading country markets. The study base year is 2013 with forecasts to 2017 and 2023.
According to Morvey, synthetic lubricants mentioned in this study include those formulated with Group III, Group IV (PAO), and various Group V basestocks. Full synthetics have 100% of these basestocks; semi-synthetics have a portion (~20% to 30%) of these basestocks, though there is no generally accepted cut-off.
Globally, synthetic and semi-synthetic lubricants account for close to 13% of total 2013 finished lubricant demand with Europe claiming the greatest percentage, at 28%, followed by North America at 15% and the Asia Pacific region third at 10%. South Americas synthetics penetration reached 7 percent, while Africa and Middle East together was just 4 percent.
Morvey said Much of the increase in synthetic lubricant demand has to do with OEM technical demand, new vehicle sales in Asia-Pacific, and industrial and commercial equipment modernization. The conversion from conventional to synthetic PCMO is driven by the technical demands of OEMs such as Toyota and Honda who have significantly increased their requirement for synthetic oils."
In 2013, PCEO accounts for 75% of total consumer lubricant demand, with North America the leading region, The highest synthetic penetration is in Europe, being driven by established OEM technical demand in both premium and mass market vehicles, consumer demand for extended ODIs, lower maintenance costs and environmental benefits. While overall synthetic penetration in the consumer market is 26%, penetration by major countries varies significantly with the highest in the UK. Germany has the strictest definition of "synthetic" and the highest penetration of full synthetic. However, when semi-synthetics are included, the country is eighth in terms of synthetic/semi-synthetic penetration.
Morvey said that in all the country markets synthetic motor oil sales mainly go through the installed channels. Within the installed channels, more of the product is being consumed and pushed through the OEM franchise workshops. In most cases, the mechanic makes the decision on part of the customer on the brand to be used from a set of OEM approved brands, said Morvey.
Morvey stated that global synthetic lubricant demand is dependent on a number of regulatory, technological, marketing, and economic drivers. OEM recommendations is one of the most important drivers for increased demand of synthetic lubricants in both the automotive and industrial segments. This was most evident in the United States, beginning in 2010 and 2011, as conversion to synthetics was carried out in PCEO by Toyota, Honda, and General Motors in both factory and service fill applications.
In 2013, HDEO accounts for 75% of total commercial finished lubricant demand with Asia-Pacific being the leading region. Overall synthetic lubricant penetration in the commercial market is only 6% though. Penetration by major countries varies significantly with Europe at 24%, followed by North America at only 4% (synthetic and semi-synthetic). Germany has the highest overall synthetic penetration due to the large portion of the market using semi-synthetic products. Most commonly used synthetic products include gear oils and transmission fluids due to long drain intervals and extended warranty programs from select driveline equipment OEMs.
Regarding industrial lubricants, Morvey pointed out that the Asia-Pacific region has continued to capture industrial activity, and its share of industrial lubricants has grown from 37% in 2008 to 43% in 2013. This trend is slowing down and may stop, according to Morvey. Overall synthetic penetration in the industrial market is 12%. Penetration by major countries varies significantly with Europe at 17%, followed by North America at 16% and Asia Pacific at 9%. Germany has the highest overall synthetic penetration in the industrial market. Europe and Germany in particular are trendsetters on Health Safety and Environment (HSE) matters which drives synthetic usage.
In 2013, ExxonMobil is estimated by Kline to retain the #1 market share among of finished synthetic lubricants at global (18%) and regional levels (as high as 24% in North America). Globally, BP follows at 11% and then Shell at 9%. "ExxonMobil's Mobil 1 line of synthetic lubricants maintains a consistent message and one that is easily recognized, regardless of region or country market".
