Lubricants forecasts to 2010 & 2015
US lubricants demand to accelerate through 2010
US demand for lubricants is forecast to grow less than one percent per year to 2.8 billion gallons in 2010, outpacing the gains seen during the decade from 1995 to 2005, but still significantly lagging growth in GDP. Advances will largely be a result of increased manufacturing activity, fueling demand for industrial lubricants such as hydraulic fluids, process oils and greases. However, volume gains will be restricted considerably by trends toward longer-lasting lubricants, extending oil drain intervals and reducing overall lubricant demand.
Higher-end base oils to gain market share
Significant shifts in demand for lubricating base oils is expected, as higher quality basestocks such as Group II, II+ and III petroleum oils, as well as synthetic types, are expected to increase their share of the market at the expense of Group I and naphthenic base oils. Better quality base oils are necessary for lubricants to comply with new industry standards, including ILSAC GF-5 motor oils, API CJ-4 diesel engine oils, and DEXRON VI and MERCON V transmission fluids. Environmental concerns will also drive demand for rerefined basestocks and products derived from bio-based sources such as soybean oils.
Process oils to be fastest growing product segment
Engine oils -- which accounted for just over half of total lubricant demand in 2005 -- are expected to grow at an average pace through 2010, encouraged by increasing motor vehicle miles traveled but restrained by trends toward less frequent oil changes. Process oils will see the most rapid growth, fueled by a rebound in manufacturing activity, with electrical oils, rubber oils and ink oils reversing declines posted during the 2000-2005 period. Demand for transmission and hydraulic fluids is projected to decline through the forecast period, as changing standards for automatic transmission fluids will dramatically increase drain intervals, limiting consumption of these lubricants.
Light vehicle aftermarket to remain largest outlet
The light vehicle aftermarket will remain the largest outlet for lubricants, accounting for one-third of demand in 2010. However, light vehicles will be the slowest- growing market, restrained by the introduction of improved engine oils and transmission fluids resulting in extended drain intervals. Manufacturing markets
-- both durable and nondurable goods
-- will benefit from increased manufacturing
activity compared to the 2000 to 2005 period, as lubricants for food and beverage processing and machinery production will post the best gains.
