Kline estimates that synthetics and semi-synthetics accounted for 9.7 percent of the global finished lubricant demand in 2007. Last years demand – including conventional, synthetic and semi-synthetic oils – reached nearly 40 million metric tons, with industrial lubricants accounting for 45 percent, commercial automotive for 29 percent and consumer automotive at 26 percent.

While 9.7 percent is the global number, the details are really at the country and product-type level, George Morvey, Klines project manager of energy, told Lube Report.

China [for example] consumes the most passenger car motor oil in the Asia-Pacific region, yet only 2.5 percent of its PCMO demand is synthetic and semi-synthetic, Morvey said. There is only upside potential, but there are socioeconomic factors in play that will determine just how fast syn lube demand grows. First, people have to be able to buy a car.

In South America, the market has to first move from mono to multi-grades before it can adopt synthetic engine oils, he said.

Morvey continued that in the United States about 15 percent of total consumer engine oil is synthetic and semi-synthetic. Imagine how much higher it would be if General Motors and Toyota had been filling every crankcase with synthetic PCMO and tied warranty coverage to it for the last five years.

Two-thirds of Europes consumer automotive engine oil demand in 2007 was synthetic and semi-synthetic, the highest of any region.

According to the Kline study, global synthetic lubricant demand is dependent on a number of regulatory, technological and marketing drivers.

Some of the key drivers include limiting automotive emissions and enhancing fuel economy standards worldwide. As developed and developing nations move towards minimizing the level of hydrocarbons, carbon monoxide, nitrogen oxides and particulate matter in tailpipe emissions, the use of lower viscosity, synthetic oils that minimize carbon deposits will drive the use of synthetic automotive lubes, Morvey said. Lower viscosity lubricants contribute to increased fuel economy, as high fuel prices and decreasing crude oil resources will create demand for synthetic lubricants.

One of the most important drivers, the study found, will be automotive and industrial original engine manufacturers with their vehicle recommendations and extended warranties requiring synthetic lubricants.

The data also suggest that a global focus on controlling air, water and ground pollution, and health and safety regulations will drive the demand for biodegradable synthetics that are safe for both the environment and workers. The increased availability of high-performance lubricant base stock – including Group III capacity expected to increase to 2 million tons per year by 2010 – will also create a supply push.

But in a price sensitive region like the Asia-Pacific market, Morvey says, Its safe to assume that as more of the announced Group III capacity comes on stream in Asia-Pacific, and an excess capacity could depress base stock prices, its likely that synthetic products produced in that part of the world could be competitively priced or within the reach of a broader group of consumers.

Regionally, including conventional, synthetic and semi-synthetic oils, Asia-Pacific was the largest consumer of finished lubricants in 2007 at 33 percent, North America at 28 percent, Europe at 18 percent, South America at 7 percent, and the rest of the world at 14 percent.

Morvey said that the awareness of all these synthetic lubricant benefits ultimately acts as a marketing tool that further drives growth in the developed and developing countries.

The last time we did a synthetics study was 1999, but it covered the U.S. only. Id agree it’s rising, but incrementally each year at best. This wont grow like internet access or iPod sales.