The NPRAs Quarterly Index of Lubricant Sales, released March 10, showed volumes in retreat across all sectors compared to a year earlier, with the largest decline shown in greases. Full-year comparisons of volumes for 2008 versus 2007 also showed decreases in all sectors.
In the fourth quarter, the automotive oil index declined 25.6 percent to 69.4, compared to 93.3 in 2007s fourth quarter. For the full year 2008, automotive lubricant sales declined 10.6 percent to an index of 86.4, down from 96.7 for 2007.
Industrial lubes dropped 21.7 percent to 75.9 in the fourth quarter, compared to 96.9 in the year earlier period. During 2008, industrial lubes reached 89.8 on the index, down 8.2 percent from 97.8 in 2007.
George Morvey, project manager of energy for Little Falls, N.J.-based consultancy Kline and Co., said the drop in demand for automotive oils and for industrial lubricants used in automotive manufacturing is not a surprise to anyone following the market.
Since vehicles arent selling, theres obviously been an effect on industrial lubricants such as general industrial oils, hydraulic oils, gear oils, greases, all of those products used in the transportation segment, Morvey told Lube Report. Theres also an impact on metalworking fluids. Even on the PCMO [passenger car motor oil] side, less vehicles going out the door means less need for factory fill, and less cars being bought means less cars being serviced at the dealership. It trickles through the whole system.
Morvey believes the recession is also affecting the choices people make in lubricants for their motor vehicles.Ive got to believe in the recession, that people are cutting back on their spending, questioning spending, or looking to reduce costs, he said. When that happens – the whole market declining – it is still impacting the major brands. If someone has to do an oil change themselves, some percentage of that retail customer is going to downgrade from a branded motor oil to a store brand or private label.
In lubricating grease sales, NPRAs data showed a 40.4 percent drop to an index of 54.9, compared to 92.1 in 2007s fourth quarter. For full year 2008, grease sales fell 17.1 percent to 76.9, compared to 92.8 for 2007.
Process oils in the fourth quarter declined 28.6 percent to a 64.9 index, down from 90.9 a year earlier. For the full year in 2008, process oils wound up with an 87 index, down 12.6 percent from 99.5 for 2007.
The association noted that it changed the base year from 2002 to 2006, effective with the first-quarter 2008 QUILS report. NPRA also restated data for 2006 and 2007 because of a change in the reporting population.
The quarterly reports are for use as a gauge of market trends, the NPRA has said, rather then to measure total sales, because relatively few marketers participate. The associations member companies that report quarterly data are refiners as well as marketers that represent more than 65 percent of the lubricants volumes reported for NPRAs more comprehensive annual report on lubricating oil sales.