US demand to reach 2.5 billion pounds in 2017
Demand for lubricant additives in the US is expected to increase to 2.4 billion pounds in 2017, valued at $3.8 billion, with growth resulting from rebounding lubricant production and modestly rising additive treat rates. Additives such as antioxidants and friction modifiers, which are capable of providing longer lubricant service life or fuel efficiency benefits, will see the strongest demand growth, while those such as antiwear and extreme pressure additives containing potentially undesirable chemistries will experience below average advances. OEM specifications for lubricant performance will continue to drive changes in formulations, with particular focus on lubricants’ contribution to meeting fuel economy and emissions regulations leading to increased demands placed on related lubricant characteristics.
Industrial uses to outpace automotive applications
Automotive applications tend to be highly technical and present a larger market for both finished lubricants and lubricant additives than do industrial uses. However, demand for additives in automotive lubricants will be restrained due to weak growth in vehicle usage, lengthening service intervals, and little room to further increase additive concentrations. This will have the largest impact on deposit control additives, including dispersants and detergents, which are a major component of engine oils and account for the largest share of total lubricant additives demand. Deposit control additives will grow at a below average rate, despite benefiting from strict requirements for engine cleanliness present in the upcoming GF-6 passenger car engine oil specification.
Though smaller in volume than automotive markets, industrial lubricants will exhibit stronger growth in both lubricant production and additive concentrations. Treat rates will rise most rapidly in general oils and hydraulic fluids, with trends in finished lubricant production favoring these fluids as well. Industrial engine oils, such as those used in rail and marine applications, power generation, and other stationary engines, contain among the highest levels of additives used in industrial lubricants, and will thus continue to be important markets for additives. Industrial engine lubricants will face many of the same future challenges as automotive engine oils, with fuel efficiency, equipment protection, and lubricant service life all important factors influencing the demand for additives.
Environmental concerns to continue affecting demand
Environmental concerns will continue to play a major role in lubricant formulation and use. Reduction of elements such as chlorine, phosphorus, sulfur, and metals has proceeded at a rapid pace over the past decade, particularly in automotive lubricants. Although there is no immediate regulatory push for further reduction of these chemicals in automotive lubricants, end users in all markets will increasingly demand lubricants perceived to be less harmful to equipment, worker health, and the environment. Use of more environmentally friendly fuels, including renewable fuels, in both automotive and industrial engines will also drive changes in lubricant formulation and additive demand. For example, expanding use of biodiesel in the motor vehicle fuel pool will require better oxidation and corrosion protection from lubricants. In contrast, falling sulfur content in marine fuel oil may reduce the need for detergents in marine engine lubricants.