India and China Drive MWFs Growth

Global consumption of metalworking fluids will swell in coming years as increased industrialization in Asia-Pacific boosts the regions share to nearly half of the market and India sets to outpace Chinas manufacturing growth by 2020, a recent report forecast.

The Asia-Pacific region is predicted to account for around 46 percent of the global metalworking fluids market, which is forecast to grow at a compound annual rate of 4 percent through 2020, according to a Technavio Research report.

Asia, the worlds biggest contributor of revenue to the segment, will continue to be the largest regional market in the next four years, the London-based firm said. Removal fluids stay on pace to represent around 52 percent of all metalworking fluids during that time-frame. A major driver for market growth in APAC is the massive consumption of removal fluids, explained Technavio in a press release.

Manufacturers of transportation equipment are the largest category of fluid end-users. If their dominance continues, they will consume around 37 percent of metalworking fluids by 2020.

Much of the markets growth will come from India and China. The rise of these neighboring countries as global manufacturing hubs will significantly benefit the metalworking fluids market during the forecasted period, noted Chandrakumar Badala Jaganathan, a lead analyst for Technavios metals and minerals research department. In addition, the increase in mining will generate a subsequent demand for metalworking fluids from the primary metal manufacturers.

Although China, the worlds second-largest economy, willtake large strides in the growth of its transportation, manufacturing, and metal fabrication segments in coming years, Indias industrial base could be growing faster by 2020. Due to [Indias] substantial change in the foreign direct investment policies in recent years … there has been a steady influx of capital in the growing manufacturing and metal fabrication segments in the country, said Chandrakumar.

Some factors threaten to thwart the growth of the metalworking fluid market. One is the increased adoption of near-dry machining techniques. In conventional wet machining techniques, the working metal and the equipment are flooded with metalworking fluids, thereby increasing the overall operational costs, the report pointed out. Contrarily, near-dry machining requires minimal quantities of these fluids, thereby the environmental effect of this technique is also comparatively less. Ford has implemented near-dry machining in six of its facilities, and other original equipment manufacturers are likely to move in this direction as well as manufacturers seek cost-efficient technologies and strive to comply with more stringent government regulations.

Likewise near net shape casting, micro-lubrication,three-dimensional metal printing, hydroforming and high-speed cutting all use significantly smaller volumes of fluids than flood processes. Also, theres been a growing inclination toward synthetic fluids that provide better tramp oil control than conventional fluids and offer accurate concentration measurements, generate less foam, reduce mist and extend pump life by lowering oil contamination.

Biosynthetic fluids are also taking on more prominence in the market, a phenomenon Technavio attributes to strict environmental regulations coupled with the fluctuating prices of base stocks.

The market is as competitive as ever and is exceedingly fragmented as a result. More than half of the market is served by smaller players that are focused on specific end-use applications and geographic area, the press release continued. Owing to the pricing pressures, the leading vendors are resorting to market alliances while the local players are leaving the industry.

The reports list of the most prominent suppliers in the market worldwide include Indias Apar Industries Ltd. and Columbia Petro; Japans Idemitsu Kosan, JX Nippon, Yushiro Chemical Industry, Daido Chemical Engineering Corp. and Cosmo Oil; Indonesias Pertamina; and Sinopec, of China; among others based in North America and Europe.