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, including market share and product segmentation, 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.
The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.