Freedonias World Lubricants study forecasts that world demand for lubricants will advance 2.3 percent per year to 41.8 million metric tons in 2010, and will climb further to 46.6 million tons by 2015.

The study predicts the value ofglobal lubricantswill grow far faster thanthe volume, rising 5.7 percent annually from $35.7 billion in 2005 to $47.2 billion by 2010,reaching $61.9 billion in 2015. Estimating the global price of lubricants to be $960 per ton in 2005, the Freedonia study predicts the per-ton price to increase to $1,130 by 2010, and to $1,330 by 2015.

Although engine oils will continue to make up nearly half of all lubricants demand worldwide, the study predicts the fastest growth will take place in process oils, which are often consumed during processing and less vulnerable to trends toward reducing lubricant consumption.

The rubber and plastic processing industries, which use process oils as extenders and additives, are the biggest consumers in volume terms, Furst said. The Asia/Pacific region is by far the fastest growing, with strong demand in big markets like China and India, as well as smaller countries such as Malaysia and Thailand.

The study projects that gains for hydraulic fluids will exceed the global average for lubricants, fueled by growing mining activity and oil and gas production, along with the increasing mechanization of agriculture and construction industries in developing nations.Furst said the largest gain in hydraulic fluids usage will stem from Chinas booming manufacturing market. Apart from that, Eastern Europe is expected to see solid growth – driven by rapidly growing motor vehicle production – and demand in the Africa/Mideast region is also gaining, he said.

Increasing motor vehicle ownership and a rising number of kilometers traveled per vehicle will drive gains in automotive lubricants, the study concluded. Asia/Pacific is the fastest growing in terms of increased motor vehicle ownership, Furst said, driven by double-digit gains in Chinas usage of light vehicles.

The study forecasts 4.2 percent annual growth in lubricants demand for the Asia/Pacific region from 2005 to 2010, reaching about 15.3 million metric tons by 2010. The Africa/Mideast region, which has the lowest rates of vehicle ownership in the world, is also seeing strong gains, Furst said.

According to the study, the prevailing global trend favors reducing lubricant consumption, both for environmental and cost-effectiveness reasons.

In North America and Western Europe, manufacturers looking to reduce costs are turning to longer-lasting or better-performing lubricants, which reduces the quantity consumed,Furst said. Regulations – both environmental and performance related – are also driving down consumption.

He also noted a trend towards higher-quality lubricants in less industrialized nations. In the 1990s, when a lot of countries began to liberalize their lubricant markets, major international producers tried to compete on price, he said. But now that state-owned oil companies have lost so much market share to the multinationals, theyre starting to improve the quality of their products as well.

It also foresees less growth in demand in Japan. Japan is a highly mature market, with relatively slow growth in manufacturing and the number of vehicles on the road, Furst said. Overall lubricant quality is getting better as well, reducing consumption in terms of volume.

Freedonia’s studynotes that over a thousand companies manufacture lubricants worldwide, but over half of the global market is supplied by just eight companies: majors Shell, Exxon Mobil, Chevron and BP; regional suppliers Total and LukOil; and state-owned PetroChina and Sinopec.

The 397-page World Lubricants study is $5,400 from The Freedonia Group. For more information, visit www.freedoniagroup.com.