High performance refers to several types of lubricants, Freedonia analyst Ned Zimmerman noted, including lubricants capable of handling more strenuous environments without breaking down, lubricants that achieve desired performance levels with significantly reduced lubricant volume consumption, and motor oils that have longer recommended service change intervals. This may also be viewed in terms of lubricants based upon [API] Groups II, II+ and III base oils, as well as various synthetic base oils, Zimmerman told Lube Report.

The report also foresees increased global competition in lubricant-consuming industries, which will then drive trends such as the reduction of lubricant volume consumption in an effort to minimize operating costs, the analyst explained.

Overall, Freedonias study projects world lubricant demand in the long term will increase 1.6 percent per year to 40.5 million metric tons in 2012, after having increased 2.2 percent per year from 2002 to 2007. Although growth will be modest in volume terms, the study noted, value gains will be more substantial as the more expensive high-performance lubricants are substituted for lower value ones.

The study expects the strongest advances in lubes demand to occur in developing Asian countries – including China, India, Indonesia and Malaysia – due to ongoing rapid industrialization as well as rising car ownership rates, particularly in China.

The effect of rapid industrialization in this case is expected to be increased use of mechanized manufacturing processes, as well as heavy machinery in construction and natural resource extraction, all of which would contribute to higher lubricant consumption in countries where baseline levels were relatively low in comparison to more developed industrialized nations, Zimmerman stated.

Some examples of the growth industries in developing Asian countries include motor vehicle production, plastic production and processing, and power generation, primarily electricity, he added.

Despite the downturn in the global motor vehicle market in late 2008 and early 2009, the study still expects motor vehicle lubricant demand will start to expand from the point that an economic recovery begins to take hold throughout the forecast period to 2012. The study doesnt estimate when such a recovery might start.

Freedonia said that while the fastest growth in lube demand will eventually be in manufacturing and other markets, the demand in those categories will still represent a slowdown from the 2002-to-2007 time period, as the global economic slowdown of 2008 and 2009 restrains upward advances in industrial lubricant demand through 2012. The other markets include agriculture, construction, non-motor vehicle transportation (such as marine and railroad uses), forestry, mining, oil and gas production, and power generation.

The Asia/Pacific region, led by China, will continue to be the primary driver of growth in these markets due to companies worldwide pursuing the regions key advantages of relatively low labor costs and political stability, Freedonia concludes in the study. Latin America and the Africa/Mideast region will also achieve favorable growth in manufacturing as significant countries in both regions continue their industrial development.

The 428-page World Lubricants study is $5,700 from The Freedonia Group. For more information, visit www.freedoniagroup.com.