Hurricanes Hampered U.S. Lube Sales in 2005


U.S. sales of lubricants, greases and process oils fell just short of 2.5 billion gallons in 2005, according to data released last week by the National Petrochemical and Refiners Association. The trade groups annual Report on Lubricating Oil and Wax Sales shows that automotive lubricants remain by far the largest market, with 57 percent of the total, versus industrial lubricants at 20.6 percent of the total, and process oils at 17.4 percent. Metalworking oils hold 2.9 percent of the market, and lubricating greases 2.1 percent.

The 80-page statistical report also offers comparative data from companies that respond with sales figures for both years. This comparative data can be used to help pinpoint market trends, unlike the total reported sales volume, which varies depending on the population of the surveys voluntary respondents.

However, for the first time in recollection, the 2005 total and comparative data are exactly the same, pointed out Dick Chuska. We had data for both years from all reporters, and that doesnt usually happen. Based in Montgomery, Texas, near Houston, Chuska is a consultant both to NPRA and to Veris Consulting LLC, the independent accounting firm which gathers the confidential data.

Overall, he observed, the 2005 data show a decrease of 2.4 percent for sales of all lubricants compared to 2004. Hardest hit were process oils, which fell from 447 million gallons sold in 2004 to just 417.6 million gallons in 2005, according to the new report. Thats a decrease of 6.6 percent, which had the effect of dragging down the performance of all products.

Not that many other categories saw an uptick. Sales of automotive oils, for example, fell 1.8 percent last year, to 1,464 million gallons, while sales of industrial oils dipped to 565 million gallons, down 1.3 percent, according to the NPRA report.

One bright spot: Sales of lubricating greases saw gains of 2.2 percent overall, reaching 51.5 million gallons in 2005 versus 50.4 million gallons a year earlier. Unfortunately, thats just a smear in the lubricants bucket, as grease represents only 2 percent of the total market. Other gains were reported in sales of electrical oils and compressor oils, up 12 percent and 8 percent.

NPRA is cautious not to make judgments about why sales data may shift each year or where theyre headed next, Chuska emphasized, and generally the lubricants market remains a rather flat business. But Hurricane Rita did have an impact in the last quarter of the year, theres no question about that. It certainly lowered sales.

The effect of [interruptions in] base stocks supply was seen most particularly, he continued. If you look at NPRAs Quarterly Index of Lubricant Sales report, youll also see that sales in the last quarter of the year were down, and sales of process oils were down even more. The quarterly survey relies on a different set of respondents and is not an absolute gauge of market strength, but is something of a bellwether for it, he said.

Terry Hoffman, senior sales manager at base oil refiner Valero Marketing & Supply Co., in San Antonio, Texas, said no one should be surprised that sales volumes declined in 2005. After Hurricane Rita hit last September, there were a lot of problems people had in making finished products, and there were additive supply issues too.

Hoffman, who is a longtime member of NPRAs Statistics Committee, noted that process oils lost ground to the tune of nearly 30 million gallons in 2005 versus 2004. One of the worst-hit products was agricultural spray oils, he added, which fell 33 percent. Remember that three hurricanes hit Florida last year; one of the biggest agricultural products is citrus orchard sprays, and their sales probably were down a lot because of it. This shows the impact on our entire industry that might be traced to one niche part of the business.

Other doleful performers were white oils (down almost 12 percent), and paraffinic and naphthenic process oils used in applications such as inks, coatings, paints and defoamers (down 10 to 12 percent).

On the positive side, Chuska said that the total number of responses this year was higher than ever. This was the first year that we had a comprehensive effort along with the Independent Lubricant Manufacturers Association to gather data from more companies, he said. Hoffman conceded that this might also have its drawbacks, with first-time respondents sometimes not completing NPRA’s survey form correctly. You have to be careful because the accuracy of these numbers always depends on the willingness of the responding companies to work the data and classify it correctly.

In the end, 2005 had a lot of static and noise that make it difficult to get a clear picture of the market, Hoffman said. It will be a lot more interesting when we have the 2006 data, he said, because then we can compare that to the 2004 data and eliminate the hurricane effects and see whats really happening to the market.

NPRAs 2005 Report on U.S. Lubricating Oil and Wax Sales is available now, at a cost of $300 per copy for nonmembers. Visit, and download the order form from the Publications link.

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