Engine oil is expected to remain the fastest-growing synthetic product type, growing 12.4 percent per year to $3.2 billion in 2015, compared to $1.8 billion in 2010 and $860 million in 2005, the study forecasts. It is projected to benefit from a rebound in motor vehicle output from the declines of the 2005 to 2010 period, along with continued gains in the number of motor vehicles in use.

Factors expected to drive demand for synthetics in the engine oil market through 2015 include adoption of the GF-5 and API SN engine oil specifications in 2010, and General Motors proprietary Dexos1 engine oil specification.

Aftermarket sales of synthetic engine oils will be promoted by ongoing consumer education about the benefits of synthetic products and manufacturers recommendations for synthetic oils as part of regular maintenance, Freedonia analyst Bridget McMurtrie told Lube Report.

Freedonia projects demand for synthetic transmission oil and hydraulic fluids will grow 11.5 percent annually to $955 million by 2015.

McMurtrie noted that original equipment manufacturers are engineering more efficient smaller transmissions with heavier load capacities that offer smoother shifting, as well as longer fluid-life capabilities. The increasing performance requirements of these transmissions, along with tightening environmental requirements for emissions, will stimulate advances going forward. Additionally, end users will increasingly seek out products with long life properties, such as synthetic fluids, that extend drain intervals, she said.

The study forecasts synthetic metalworking fluid demand in the U.S. will grow 6.2 percent per year to $290 million in 2015. According to the analyst, synlubes may be more favorable for worker health and safety when the fluids are vaporized, but several factors will continue to restrict demand for synthetic metalworking fluids.

Environmental concerns will continue to impact the market, generating interest in recycling and fluid management programs, while worker safety concerns promote demand for bio-based fluids due to the health risks associated with inhalation of metalworking fluid vapors by metal workers, McMurtrie pointed out. Additionally, end users will increasingly pursue cost-cutting measures, such as dry machining and minimum quantity lubrication, thus restraining overall gains. As in other segments of the overall lubricant market, market volume will also be impacted by extended drain intervals.

While bio-based lubricants have a more favorable inhalation toxicity profile and are more biodegradable, she noted they still have some disadvantages. For example, they tend to be readily oxidized or hydrolyzed, provide a medium for bacteria growth, and demonstrate low fluidity at colder temperatures, she noted. This should ensure a place for synthetics in a number of niches. For all metalworking fluids, products which allow higher machine operating speeds, reduce rejects and decrease tool wear will be in demand.

Synthetic gear oil formulations for the wind turbine segment are seeing significant growth. Synthetics are favored in this application due to the high performance requirements of wind turbine gears, McMurtrie said. Wind turbines face extreme conditions, and lubricants must be capable of carrying higher loads at higher temperatures while providing protection against micro pitting. Synthetics are also preferred due to their longer oil change intervals.

Freedonia expects modest growth in heat transfer fluids demand, which is projected to increase 3.4 percent per year to $2.2 billion in 2015.

The 282-page Synthetic Lubricants & Functional Fluids study is $4,900 from Cleveland-based The Freedonia Group. See www.freedoniagroup.com for details.