Offsetting that growth in additive use are the ongoing trends toward extended drain intervals, lubricant recycling programs and sealed-for-life components, according to Freedonias Lubricant Additives study. In addition, with increasing base oil quality, the importance and value-added characteristics provided by the additive package are diminished as highly refined base oils generally require fewer additives.

Over the past five years, the report says, U.S. lube additive demand grew 1.5 percent per year to $1.5 billion. Deposit control agents were the biggest sellers during that period, accounting for nearly one-third of total sales. Viscosity index improvers ranked a distant second, followed by antiwear and extreme pressure additives, antioxidants, corrosion inhibitors, defoamers and pour point depressants.

Freedonia predicts that deposit control additives will continue to account for the biggest part of the U.S. market, as changes in diesel oil specifications and diesel engine emission standards will further support demand for these additives. However, demand growth for these additives will be below average through 2006, reflecting saturation in key lubricant applications. Above-average growth is expected from high-value additives, such as antioxidants, defoamers, pour point depressants and other smaller-volume products.

In volume terms, says Freedonia, antioxidants will see the best opportunity for growth due to their role in creating higher performing lubricants.

Ironically, the Cleveland firm says that passenger car motor oil upgrades are causing a reduction in additive demand, the opposite effect of the new diesel oil standards. The report explains that new CI-4 diesel oils require more dispersants to deal with soot being dumped back into engines by new exhaust gas recirculation systems. On the other hand, last years passenger car motor oil upgrade, API-SL, lead to a shift from Group I to premium base oils, which generally require less additive treatment. The next passenger car motor oil upgrade, GF-4, is expected to have the same effect.

U.S. Lubricant Additives Demand (million dollars)

Source: The Freedonia Group, Inc.

The 213-page report costs $3,700 per copy. For information: The Freedonia Group Inc., 767 Beta Drive, Cleveland, Ohio 44143-2326. Phone: (440) 684-9600. Fax: (440) 646-0484. Email: pr@freedoniagroup.com. Website: www.freedoniagroup.com.