U.S. Demand Forecast to Stay Flat

U.S. lubricants demand - estimated at 2.5 billion gallons in 2017 - will remain stable through 2022 as shrinking demand for consumer lubes is offset by demand growth for industrial and commercial automotive products, according to forecasts of a market research and consulting firm.

Industrial lubricants are the largest segment of the U.S. market, accounting for nearly half of demand. Through 2022 this segment will grow at a compound annual rate of 0.5 percent, swelling from just over 1.25 billion gallons in 2017 to 1.75 billion gallons, Sushmita Dutta, a project manager at Kline & Co., said in a recent interview.

Kline also forecasts that the commercial automotive segment will grow - at a compound annual rate of 0.5 percent through 2022, thanks to expansion of for-hire, private fleet and lease-rental services.

In contrast, demand for consumer automotive lubes is projected to slip 1.5 percent, from just over 660 million gallons in 2017 to 650 million gallons by 2022.

Kline expects that segment, which consists largely of passenger car motor oils and other light-duty automotive lubes, will decline due to improvements in engine technology that is driving demand for high quality lubricants with extended oil drain intervals. Besides, the car population in the United States is not growing at a rate fast enough to drive lubricant demand upwards, Dutta told Lube Report in response to follow-up questions about a webinar last month.

She added that the market will continue shifting toward lower-viscosity oils. The market is shifting towards low-viscosity engine oils. We expect higher growth rates for 0W-XX in [the] case of passenger car motor oil, and 10W-XX in [the] case of heavy-duty motor oil. As a result, we expect a significant increase in the shares of 0W-XX and 10W-XX in PCMO and HDMO, respectively, Dutta noted.

Currently, 5W-30 and 5W-20 viscosity grades are the most popular in the U.S. consumer automotive market, accounting for 50 percent and 25 percent of the segment, respectively. Trailing is 10W-30 with roughly a 13 percent share. In the commercial segment, 15W-40 makes up just over 75 percent of demand, with 10W-30/40 and 5W-30/40 each accounting for approximately 6 percent of commercial demand.