Machinery design is changing every year, if not every month, and this leads to rapid upgrades in lubricant specifications. The spread of API Group II and III base stocks has to date helped the industry keep up with rising lubricant performance demands, but the burden of providing desired performance falls heavily on additive manufacturers.

Some big additive suppliers have also shown interest in entering the business of finished lubricants. Before long we will probably see products in key categories such as automatic transmission fluids marketed under the brand of an additive company or produced jointly with original equipment manufacturers for factory fill.

With business prospects improving, it should come as no surprise that new suppliers are entering the additive market mainly from places such as India and China and also in countries like the United States and Brazil. Some of these new companies are looking for merger and acquisition opportunities as a quick route to larger scale.

Globally, close to 80 percent of lube additive volume goes to automotive lubes, which makes the auto industry a good indicator for additive trends. Today worldwide vehicle population stands at more than 1.1 billion, and the number increases by about 70 million units a year, thanks to rising incomes and young populations in Asia, the Middle East, Africa and Eastern Europe. The globe is heading toward 2 billion cars, and this is good news for additive manufacturers.

There are several trends in the auto industry that will directly affect additive suppliers:

downsizing of gasoline engines;

increased use of turbochargers;

rising popularity of fuel-efficient vehicles;

increasing use of diesel engines in passenger cars;

further changes in emission control strategies.

The worlds four primary additive suppliers – Lubrizol, Infineum, Afton Chemical, and Chevron Oronite – are raising profits year to year, but at the same time, small players are also gaining ground. In the last 12 years, their share of the market increased from less than 1 percent to about 10 percent. Also many new players are becoming specialists in components or additive packages for certain types of lubricants.

Cycles for upgrading engine oil specifications are picking up speed. Until the 1990s, it took almost 10 years for an upgrade to be adopted by the American Petroleum Institute. Today cycles have shortened to three to five years, meaning additive suppliers have less time to develop new technologies and less time to profit from them.

Rising operating temperatures, shrinking oil sump residence times, increasing loads and problems with micropitting are all issues that need to be addressed. They will likely lead to increased demand for oxidation control, water separation, foam control, detergency and protection from wear.

It is clear that the lubricant industry will need more performance from lubricant additives. This could spur the rise of small players who invest in research and development and facilities. Using existing know-how and raw materials, some are gradually acquiring small pieces of the market. These companies generally begin by formulating components, though some will advance to offering complete additive packages.

Keeping up with the pace of change will still pose a major obstacle, and survival in the additive packages market will require heavy investment in R&D. Still, we can expect the emergence of large regional suppliers that could begin to challenge the Big Four. Chinas Tianhe Chemicals or Miracema-Nuodex from Brazil could fill such roles, and at least one large player will probably emerge from India. All in all, these are interesting days in the lubricant additive industry.