Few, if any in the industry will be surprised to hear that sales dropped last year from 2000, but the association s survey offers the most comprehensive gauge of just how bad of a year 2001 was. Association officials said the results reflect the impact of last year s recession on a mature industry that expects only slow growth even during good times.

It was definitely a down year for our industry, Technical Advocacy Director Charlie Drevna said. But I think if you look at all industry, it was a down year for everyone. Things like product improvements tend to reduce [lubricant] demand anyway, so I don t think people ever expect to see much growth in the market.

Indeed, lube sales were flat in 2000 before falling off last year, comparative data from the survey show. (Since the same companies do not reply every year, comparative data including only companies supplying two years of figures are a reliable guide to industry trends.) Demand for lubricating oils dropped 3.2 percent in 2001, while greases fell 8.3 percent. Sales of automotive lubes dipped 2.2 percent, while the industrial segment shrank by 4.7 percent.

Within the industrial segment, demand for process oils dropped 5.4 percent. General industrial oils fell 3.8 percent, industrial engine oils 1.9 percent, metalworking fluids 8.5 percent.

Thomas F. Glenn, president of the Metuchen, N.J., consulting firm PetroTrends International Inc., said the year may have been even worse than those numbers indicate. He suggested that the survey misses a significant portion of metalworking fluid sales. He believes that segment lost a whopping 15 percent of its volume last year.

Glenn added, however, that lubricants is a broad industry and contended that some areas have been growing, even during a year like 2001. He also noted that some companies are improving their profitability by selling more higher-margin products, citing as an example sales of middle-tier passenger car motor oils.

The NPRA report is about volume, Glenn said. But if you look on the value side, I think you are seeing real growth in some areas. The industry is not asleep at the wheel.

In terms of volume, the NPRA survey showed falling demand for 10W-30, 10W-40 and 15W-40 gasoline engine oils. Sales of 5W-30 products held steady and 5W-20s grew sevenfold, although they still accounted for less than 1 percent of the market.

A more detailed breakdown of the industrial segment showed variations in the results for different submarkets. Sales of hydraulic oils fell 3.1 percent, industrial gear oils 10.8 percent. On the other hand, demand for turbine, circulating and bearing oils jumped 9.4 percent. Among industrial engine oils, marine slid 10.3 percent, while natural gas and railroad diesel and rose 3.1 percent and 5.4 percent, respectively.

Synthetics provided a bright spot. Sales of full synthetic grew 8.4 percent, while demand for semi-synthetics rose 3.9 percent.

Glenn and Drevna said 2002 is shaping up about the same as last year.

Preliminary numbers do not indicate an improvement on 2001, Glenn said. He added that reductions in sales for some applications stem from process changes, rather than economic factors. In some cases, I think there are real reasons for organic decline that will be irrecoverable.

Drevna noted that the association s quarterly indices on lubricant sales, which are compiled separately from the annual surveys, have shown flat sales through the first half of the year.

I don t see any further decline, he said. But I also don t see any recovery.

Copies of the 85-page report are available to NPRA members for $10, to non-members for $300. For information: National Petrochemical and Refiners Association, 1899 L Street, N.W., Suite 1000, Washington, D.C. 20036. Website: www.npradc.org