Synthetic Lubricants and Functional Fluids

Freedonia Group Inc
February 1, 2012
282 Pages - SKU: FG6828214
Countries covered: United States



US demand to reach $7.6 billion in 2015
Demand for synthetic lubricants and functional fluids is forecast to reach $7.6 billion in 2015, expanding the share of the overall lubricant market held by synthetic products. Advances will be propelled by the higher performance requirements of modern equipment, as well as increasingly stringent environmental standards. Gains will also be fueled by the increased availability of high quality basestocks due to growing investment in new basestock capacity, both in the US and overseas. As the supply of these materials expands, original equipment manufacturers (OEMs) are becoming more willing to recommend the use of high performance synthetic products, particularly as OEMs make steps toward global specifications.

Engine oil to remain fastest growing product
Engine oil will remain the fastest growing product type through 2015. These lubricants primarily find use in automotive applications and will therefore benefit from a rebound in motor vehicle output from the declines of the 2005-2010 period, as well as continued gains in the number of motor vehicles in use. The adoption of the GF-5 and API SN engine oil specifications in 2010 and the development of General Motors’ proprietary DEXOS1 certified engine oil will further promote gains. Such standards have been created to enhance fuel efficiency and reduce engine emissions, thus helping OEMs to comply with emissions regulations and corporate average fuel economy standards. In addition to GM, which now requires synthetic motor oil for nearly all of its vehicles, other leading vehicle manufacturers such as Toyota and Honda are also making the transition. This will drive demand for synthetics in the engine oil market through the forecast period.

Group III base oils, PAOs to be fastest growing materials
Among the various materials utilized to formulate synthetic lubricants and functional fluids, glycol fluids represent the leading category. However, glycol’s share of the market is forecast to decline due to maturity in the large antifreeze segment, along with a shift toward extended flush intervals and fill-for-life components in automotive design technology. Group III base oils and polyalphaolefins (PAOs) are also key materials and are projected to expand at the fastest rates through 2015. Demand for Group III basestock will be promoted by its use in engine oil applications and its ability to effectively compete against more costly synthetic base oils such as PAOs. The enhanced performance properties and environmentally friendly profile of PAOs will boost demand, as will the extended drain capabilities and customizability of PAO basestocks.

Medium, heavy vehicles to be fastest growing market
The vehicle and equipment market will remain the largest outlet by far for synthetic lubricants through the forecast period. Within this market, light vehicles account for the majority of demand due to the universally synthetic nature of antifreeze, brake and deicing (windshield wiper) fluids, in addition to the rising use of synthetic engine oils and transmission fluids. Although demand in this segment will continue to grow, much more rapid advances will be achieved in the medium and heavy vehicle sector. Fueling gains will be increasingly stringent greenhouse gas emissions and fuel economy regulations, which will generate greater interest in lower viscosity engine oils that can handle higher loads and temperatures.

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Additional Information

PRESS RELEASE

US Demand for Synthetic Lubricants and Functional Fluids to Reach $7.4 Billion in 2015

Demand for synthetic lubricants and functional fluids is forecast to climb 8.6 percent per year to $7.4 billion in 2015, with volume reaching 625 million gallons on annual gains of 3.4 percent. Synthetics will expand their share of the overall lubricant market, propelled by the higher performance requirements of modern equipment, as well as increasingly stringent environmental standards. Gains will also be fueled by the expanding availability of high quality basestocks due to growing investment in new basestock capacity, both in the US and overseas. As the supply of these materials expands, original equipment manufacturers (OEMs) are becoming more willing to recommend the use of high performance synthetic products, particularly as OEMs take steps toward global specifications. These and other trends are presented in Synthetic Lubricants & Functional Fluids, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Engine oil will remain the fastest-growing product type through 2015. These lubricants primarily find use in automotive applications, and will therefore benefit from a rebound in motor vehicle output from the declines of the 2005-2010 period, as well as continued gains in the number of motor vehicles in use. The adoption of the GF-5 and API SN engine oil specifications in 2010 and the development of General Motors’ proprietary DEXOS1 certified engine oil will further promote gains. In addition to GM, which now requires at least a synthetic blend motor oil for nearly all of its vehicles, other leading vehicle manufacturers such as Toyota and Honda are also making the transition. This will drive demand for synthetics in the engine oil market through the forecast period.

Among the various materials utilized to formulate synthetic lubricants and functional fluids, glycol fluids represented the leading category in 2010. However, glycol’s share of the market is forecast to decline due to maturity in the large antifreeze segment, along with a shift toward extended flush intervals and fill-for-life components in automotive design technology. Group III base oils and polyalphaolefins (PAOs) are also key materials, and are projected to expand at the fastest rates through 2015. The enhanced performance properties and environmentally friendly profile of PAOs will boost demand, as will the extended drain capabilities and customizability of PAO basestocks.

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