No Volume Growth For N. America


North Americas finished lubricants consumption will remain little changed, with 0.5 percent compounded annual growth from 2013, to just shy of 3.1 billion gallons in 2018, consultancy Kline & Co. projected.

In 2013, the overall finished lubricants market in North America (the United States, Canada and Mexico) stood at 2.9 billion gallons, Kline estimated, ranking second after the Asia-Pacific region.

Of the three segments of the market, we expect the consumer automotive lubricants market will shrink, whereas the commercial automotive lubricants and industrial lubricants markets will witness slow growth, Sushmita Dutta, project lead, energy, for Kline & Co., said during a webinar Sept. 17.

Industrial lubricants accounted for 51 percent of total North American finished lubricants demand in 2013, consumer automotive lubricants for a 26 percent share and commercial automotive lubricants for the remaining 23 percent. A review of the market growth over the last two years suggests this market has remained essentially flat, she said.


Major branded suppliers accounted for 43 percent of the total North American lubricants demand in 2013.

Shell topped the list with nearly 400 million gallons in volume in 2013, Kline estimated, followed by ExxonMobils nearly 300 million gallons, and Chevrons more than 150 million gallons. Trailing were BP, Phillips 66, Valvoline, Suncor Energy and Mexlub. The volumes included process oil.

In the U.S. market in 2013, Shell also led, supplying more than 300 million gallons, followed by ExxonMobils more than 200 million gallons and Chevron with about 150 million gallons. Behind were Phillips 66, BP and Valvoline.

Shell topped the consumer automotive lubricants segment in the United States in 2013, followed by Valvoline and BP. Shell also led in the commercial automotive lubricants segment in the U.S. last year, followed by Chevron and ExxonMobil.

The five leading industrial lubricants suppliers in the U.S. market in 2013 included Ergon at 11 percent, Calumet with 10 percent, ExxonMobil and HollyFrontier at 7 percent apiece, Chevron with 4 percent, Phillips 66 with 3 percent, Shell at 1 percent and Citgo with 1 percent. All other suppliers accounted for the remaining 55 percent. Dutta noted that HollyFrontier, Ergon and Calumet only participate in the process oils segment.


The United States, the largest market in North America, accounted for 85 percent of total regional finished lubricants demand in 2013. The U.S. market has not really gained in appreciable volumes since 2011, Dutta said.

Industrial lubricants accounted for more than 50 percent of demand in the U.S. in 2013, followed by consumer automotive lubricants with 26 percent and commercial automotive lubricants at 22 percent. Lubricant consumption in the consumer segment is expected to contract in the next five years, she said. The industrial segment will witness the highest demand growth.

Kline said industrial lubricants demand in the U.S. is most likely to remain fairly stable with a growth rate of 0.7 percent per year from 2013 to 2018, reaching nearly 1.35 billion gallons. Dutta explained the conservative outlook for the industrial lubricants market is because the United States is already an industrialized country, with less hope for further industrialization in the country as in other regions such as Asia-Pacific and South America. Certainly end use industries are recovering and growing, she said. Those industries are growing slowly, and at the same time certain industries are expected to witness further decline in lubricant consumption.

On the consumer side, she noted the U.S. consumer automotive lubricants market is a mature market where synthetics and semi-synthetics have already taken demand from mineral lubricants. The market continues to transition to low viscosity synthetic lubricants that have longer drain intervals, she said, adding that the increasing use of fill for life fluid systems designed by original equipment manufacturers restricts demand for automatic transmission fluids and gear oils. Because of these types of factors, the U.S. consumer automotive demand is projected to decline from close to 650 million gallons in 2013 to just over 630 million gallons in 2018.

The commercial segment is expected to see modest growth of 0.6 to 0.7 percent to 2018, reaching nearly 550 million gallons. We expect that with the overall improvement in the U.S. economy over the forecast period, more commercial activities would happen, and this will lead to an increase in the size of the commercial fleet, as well as more distance miles traveled, she noted. This should drive demand in growth of the segment. However, increasing penetration of longer drain interval lubricants and rerefined lubricants will diminish the demand growth potential.

Dutta said the industrial lubricants segment in United States is slowly recovering from the negative impact of the recession period from 2007 to 2010. In 2013, there has been a marginal increase in demand to just shy of 1.3 billion gallons but it continues to remain below the pre-recession levels of 2007. The good news is the market is positive, and this is based on the fact the industrial sector of country is improving, and this is evident from countrys growing industrial production index, she said.

Canadas lubricant demand of more than 100 million gallons makes up 8 percent of total North American finished lubricant demand, with Mexicos near 70 million gallons demand accounting for the remaining 7 percent.

She noted that while industrial lubricants account for only 31 percent of total demand in Mexico, compared to 44 percent of total demand in Canada, faster demand growth is expected in Mexico. The growing industrial sector in Mexico, especially the automotive industry, will fuel this demand growth, she said. And of all the three markets in this report, Kline expects the Mexican lubricants market to witness the highest growth in demand the next five years, followed by the United States.

Klines study is titled, Opportunities in Lubricants: North American Market Analysis, 2011-2013.

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Business    Finished Lubricants    North America    Region