Synthetic Lubricants and Functional Fluids


Attention: There is an updated edition available for this report.

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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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.

INTRODUCTION
I. EXECUTIVE SUMMARY
II. MARKET ENVIRONMENT
General
Macroeconomic Outlook
Demographic Outlook
Personal Consumption Expenditures
Manufacturing Outlook
Competitive Products
Environmental & Regulatory Issues
Recycling & Re-Refining
Engine Oil Specifications
Pricing Trends
Foreign Trade & International Activity
III. PRODUCTS
General
Heat Transfer Fluids
Low Temperature
High Temperature
Engine Oils
Gasoline Engine Oils
Diesel Engine Oils
Oils for Other Engines
Transmission & Hydraulic Fluids
Transmission Fluids
Product Characteristics
Demand
Hydraulic Fluids
Metalworking Fluids
Product Characteristics
Demand
Metal Removal Fluids
Metal Forming Fluids
Other Metalworking Fluids
Dielectric Fluids
Other
Compressor Lubricants
Turbine Lubricants
Gear Lubricants
All Other
IV. MATERIALS
General
Glycols
Polyalphaolefins
Group III Base Oils
Esters
Silicone Fluids
Aromatics
Other
V. MARKETS
General
Vehicles & Equipment
Motor Vehicle & Industrial Equipment Outlook
Synthetic Lubricant & Functional Fluid Demand
Light Vehicles
Medium- & Heavy-Duty Vehicles
Aircraft/Aerospace
Industrial Machinery
Off-Highway Vehicles
Other
Energy/Power Generation
Energy/Power Generation Industry Outlook
Synthetic Lubricant & Functional Fluid Demand
Metal Fabrication
Metal Fabrication Industry Outlook
Synthetic Lubricant & Functional Fluid Demand
Process Industries
Process Manufacturing Industry Outlook
Synthetic Lubricant & Functional Fluid Demand
HVAC/Refrigeration Systems
HVAC/Refrigeration Industry Outlook
Synthetic Lubricant & Functional Fluid Demand
Other
VI. INDUSTRY STRUCTURE
General
Market Share
Competitive Strategies
Research & Development
Chemical Management Services
Merger & Acquisition Activity
Manufacturing
Marketing
Synthetic Engine Oil
Brand Name Recognition
Sports Sponsorship
Antifreeze
Other Synthetic Fluids Marketing Strategies
Distribution
Company Profiles
Air BP, see BP
AMSOIL Incorporated
Anderol Specialty Lubricants, see Chemtura
Ashland Incorporated
BASF SE
Berkshire Hathaway Incorporated
BP plc
Burmah Castrol, see BP
Chemtura Corporation
Chevron Corporation
Chevron Phillips Chemical Company LP
CIMCOOL Industrial Products, see Milacron
CITGO Petroleum, see Petroleos de Venezuela
CLC Lubricants Company
Cognis Holding, see BASF
ConocoPhillips
CPI Engineering Services, see Berkshire Hathaway
Dow Chemical Company
Dow Corning Corporation
DuPont (EI) de Nemours
Exxon Mobil Corporation
FRAM Group LLC
FUCHS Petrolub AG
Hatco, see Chemtura
Honeywell International Incorporated
Houghton International Incorporated
Lubrizol, see Berkshire Hathaway
Milacron LLC
Oak International, see Milacron
Old World Industries LLC
Petroleos de Venezuela SA
Quaker Chemical Corporation
Royal Dutch Shell plc
Royal Purple Incorporated
Shell Oil, see Royal Dutch Shell
Smith (GW) & Sons, see Quaker Chemical
Summit Lubricants, see Quaker Chemical
Total SA
Valvoline, see Ashland
Warren Oil Company Incorporated
Additional Companies Active in the Industry
LIST OF TABLES
SECTION I -- EXECUTIVE SUMMARY
Summary Table
SECTION II -- MARKET ENVIRONMENT
1 Macroeconomic Indicators
2 Population & Households
3 Personal Consumption Expenditures
4 Manufacturers’ Shipments
5 Synthetic Functional Fluid Pricing
6 Synthetic Functional Fluid Foreign Trade
SECTION III -- PRODUCTS
1 Synthetic Lubricant & Functional Fluid Demand by Product
2 Synthetic Heat Transfer Fluid Demand
3 Low Temperature Heat Transfer Fluid Demand by Chemical & Market
4 Synthetic High Temperature Heat Transfer Fluid Demand
5 Synthetic Engine Oil Demand by Engine Type
6 Synthetic Gasoline Engine Oil Demand by Chemical & Market
7 Synthetic Diesel Engine Oil Demand by Chemical & Market
8 Other Synthetic Engine Oil Demand by Chemical & Market
9 Synthetic Transmission & Hydraulic Fluid Demand by Product, Chemical & Market
10 Synthetic Metalworking Fluid Demand
11 Synthetic Metal Removal Fluid Demand
12 Synthetic Metal Forming Fluid Demand
13 Other Synthetic Metalworking Fluid Demand
14 Synthetic Dielectric Fluid Demand
15 Other Synthetic Lubricants & Functional Fluid Demand
SECTION IV -- MATERIALS
1 Synthetic Lubricant & Functional Fluid Demand by Material
2 Glycol-Based Synthetic Lubricant & Functional Fluid Demand
3 Polyalphaolefin-Based Synthetic Lubricant & Functional Fluid Demand
4 Group III Base Oil-Based Synthetic Lubricant & Functional Fluid Demand
5 Ester-Based Synthetic Lubricant & Functional Fluid Demand
6 Silicone-Based Synthetic Lubricant & Functional Fluid Demand
7 Aromatics-Based Synthetic Lubricant & Functional Fluid Demand
8 Other Synthetic Lubricants, Fluids, Additives & Blending Components Demand
SECTION V -- MARKETS
1 Synthetic Lubricant & Functional Fluid Demand by Market
2 Vehicle & Equipment Indicators
3 Vehicle & Equipment Market for Synthetic Lubricants & Functional Fluids
4 Light Vehicle Market for Synthetic Lubricants & Functional Fluids
5 Medium- & Heavy-Duty Vehicle Market for Synthetic Lubricants & Functional Fluids
6 Aircraft/Aerospace Market for Synthetic Lubricants & Functional Fluids
7 Industrial Machinery Market for Synthetic Lubricants & Functional Fluids
8 Off-Highway Vehicle Market for Synthetic Lubricants & Functional Fluids
9 Other Vehicle & Equipment Market for Synthetic Lubricants & Functional Fluids
10 Energy/Power Generation Indicators
11 Energy/Power Generation Market for Synthetic Lubricants & Functional Fluids
12 Fabricated Metal Product Shipments
13 Metal Fabrication Market for Synthetic Lubricants & Functional Fluids
14 Process Manufacturers’ Shipments
15 Process Industries Market for Synthetic Lubricants & Functional Fluids
16 HVAC/Refrigeration Industry Outlook
17 HVAC/Refrigeration Market for Synthetic Lubricants & Functional Fluids
18 Synthetic Functional Fluid Demand in Other Markets
SECTION VI -- INDUSTRY STRUCTURE
1 US Synthetic Lubricant & Functional Fluid Sales by Company, 2010
2 Research & Development Spending Patterns: Selected Synthetic Fluid Companies
3 Selected Acquisitions & Divestitures
LIST OF CHARTS
SECTION II -- MARKET ENVIRONMENT
1 Synthetic Lubricant & Functional Fluid Pricing Volatility by Product, 2000-2020
SECTION III -- PRODUCTS
1 Synthetic Lubricant & Functional Fluid Demand by Product, 2010
SECTION IV -- MATERIALS
1 Synthetic Lubricant & Functional Fluid Demand by Material, 2010
SECTION V -- MARKETS
1 Synthetic Lubricant & Functional Fluid Demand by Market, 2010
2 Vehicle & Equipment Market for Synthetic Lubricants & Functional Fluids, 2010
SECTION VI -- INDUSTRY STRUCTURE
1 Synthetic Lubricant & Functional Fluid Market Share, 2010

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