Process Oils Brighten Outlook for Lubes


Lubricant demand in the United States is forecast to grow less than 1 percent per year for the next five years, according to a study from the Freedonia Group. Thats not much but would still be an improvement on the markets performance the past five years.

The study, Lubricants: Industrial and Automotive, projects that U.S. lubricant consumption will increase at an average annual rate of 0.9 percent, to 2.745 billion gallons in 2008. Cleveland-based Freedonia said this will return demand close to the 1998 level of 2.79 billion gallons.

Freedonias study predicts that growth for the next few years will be strongest in the industrial lubricant segment. The firm said demand for process oils should grow at a 2.5 percent clip due to a recovery by the U.S. manufacturing sector. The study also noted that process oils are relatively unsusceptible to conservation measures because they are consumed during manufacturing of products such as rubber, inks and plastics.

The study projects average growth of 2 percent for general industrial oils, saying they will likewise benefit from the manufacturing rebound. By comparison, consumption of process oils fell at an average annual rate of 0.8 percent and general industrial lubricants 3.3 percent from 1998 through 2003, it said.

The study sees demand for transmission fluids and hydraulic oils increasing 1.4 percent per year through 2008. Metalworking is the only category that Freedonia expects to shrink; the study forecasts a decrease of 0.5 percent per year.

Demand for automotive engine oils is projected to rise a scant 0.2 percent per year, with growth of the vehicle population barely offsetting extensions of service intervals.

Freedonia does highlight a few niche opportunities for greater growth. The firm said demand for synthetic lubricants should grow six times faster than the overall market and that synthetics will account for 10 percent of overall demand by 2008. It also predicts higher-than-average growth for motor oils marketed specifically for high-mileage cars, all-terrain vehicles, motorcycles and scooters.

The 366-page study sells for $4,100. For information, contact Corinne Gangloff at (440) 684-9600 or by e-mail at

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