Freedonia expects longer oil change intervals to result from the greater use of higher quality, better performing products such as synthetics. The firm expects growth to remain healthy in terms of value as average prices benefit from the shift toward premium products.

The main drivers for synthetic engine oils in light vehicles will be new car recommendations for low viscosity and/or higher performance products, Freedonia analyst Jason Carnovale told Lube Report. Most 0W-20 oils (which are specified by Honda and Toyota) as well as GMs Dexos1 motor oils are primarily synthetic or at least synthetic blend products. Additionally, as consumers continue to get more comfortable with less frequent oil changes, the additional cost of synthetics will be less of a barrier.

Freedonia believes U.S. construction spending will continue a strong recovery through 2018, making it among the fastest growing lubricant market segments. The oil and gas industry will continue to provide rising demand for lubricants in oilfield and pipeline applications. Construction equipment is an important market for diesel engine oils and transmission/hydraulic fluids, Carnovale said.

The firm expects automakers and oil companies to continue focusing on ways to improve fuel efficiency. One of the most important trends will be toward lower viscosity products, such as the new SAE 16 viscosity grade, he said. SAE 16 is a lighter-weight alternative to SAE 20 and other non-winter engine oil grades.

The firm expects products such as heavy duty diesel engine oils and gas turbine oils, used in commercial and industrial markets, to experience the fastest growth.

Freedonia predicts a bright future for premium products that can offer improved lubricant performance, longer drain intervals or reduced impact on the environment. Synthetics, motor oils made with rerefined base oils and biobased oils will substantially outpace conventional petroleum lubricants, the firm suggests.

Automotive lubricants tend to be the bigger outlet for nonconventional lubricants, compared to industrial markets. However, growth will be better for nonconventional lubricants in a variety of different applications, Carnovale noted. We expect automotive lubricants to be especially important for the rerefining segment as well as synthetics, while biobased lubricants do better in certain industrial applications – e.g., transformer oils and metalworking fluids. Synthetic gear oils for wind turbines is an interesting growth area, although it remains small.

Carnovale said Freedonia is aware of proposed California Senate Bill SB 916, which would mandate that motor oils sold in the state after Jan. 1, 2017, have at least 25 percent biosynthetic content. Because of a number of factors, our feeling is that this particular bill is not likely to be passed into law – though this being California, anything is possible, he said. However, this proposal is illustrative of the growing trend of public and political support for green products that will benefit their use in the future.

Source: The Freedonia Group Inc.

The 385-page study, titled Lubricants, is $5,200 from Cleveland-based Freedonia Group. For more information, visit www.freedoniagroup.com.