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Lube Market to Inch Ahead

The years between now and 2010 will see the U.S. lubricants market reversing course and climbing slightly, to reach nearly 2.9 billion gallons in volume at decades end, versus 2.7 million gallons in 2005, according to a new study from The Freedonia Group. That represents a demand growth of less than 1 percent per year – significantly below GDP growth but still an turnabout from the 0.2 percent average annual decline seen in the first half of this decade.

In value terms, the Cleveland-based market research firm forecasts lubricant sales will rise 3.3 percent per year, to over $13 billion in sales in 2010. Thats slower than seen in recent years, largely because high crude oil costs have inflated lubricant value, Freedonia says. As crude oil prices drop from the nearly $80 per barrel peaks seen this year, the price growth in lubricants will likewise decelerate, says its new study, Lubricants.

Advances in volume will largely come from increasing manufacturing activity, the study indicates. This will fuel demand for industrial lubes such as hydraulic fluids, process oils and greases. In the automotive area, engine oils and transmission fluids will benefit from the increasing number of motor vehicles in use, especially in the medium- and heavy-duty truck market. But trends towards longer-lasting lubricants overall will tend to restrict demand considerably in both the automobile and industrial markets.

Also, demand for transmission and hydraulic fluids will slip, as changing standards for ATF will dramatically increase drain intervals and depress consumption. The study does find some hot spots: On the transportation side, engine oils for heavy-duty diesel engines will enjoy the most growth, while on the industrial side, lubricants for the production of food and beverages will set the pace.

The 346-page study is available for $4,400 from The Freedonia Group. Web: www.

More Prices Heading Upward

Late August and early September saw finished lube prices spiking upward, as several oil majors advised distributors to expect price increases. The increases were attributed to higher costs for base oils, additives and packaging.

On Aug. 30, Chevron told distributors it will raise prices for lubricating oils by an average of 6 percent to 10 percent, and its gear lubes and greases would be going up an average 3 percent to 5 percent. These increases are to take effect Oct. 2.

ConocoPhillips also informed distributors of increases, to be effective Oct. 11, a distributor told ConocoPhillips broad stable of brands include the Conoco, Phillips, Kendall and 76 Lubricants labels.

Those increases came on the heels of ExxonMobils Aug 21 announcement that it was raising finished lube prices 5 percent to 9 percent. The increases apply to conventional and unconventional lubricants and greases, whether sold under the Exxon or Mobil brands or unbranded. ExxonMobil also advised distributors that price increases are likely on the way for its heavy-duty engine oils meeting the new API CJ-4 category.

Graham Imposes Surcharges

Graham Packaging Co. last month announced an energy surcharge taking effect Oct. 1, in response to what it called a continued run-up in energy-related inflation. Energy-related costs are up 22 percent from the start of last year and this is well beyond what we are able to offset, even through aggressive cost and productivity improvements, said Phillip R. Yates, chairman and CEO of the York, Pa., headquartered company. Graham Packaging is the leading supplier in the United States, Canada and Brazil of plastic quart/liter motor oil bottles made of high-density polyethylene (HDPE).

Latin America: Petrobras Leads

Petrobras, Brazils government-controlled oil giant, said its Lubrax lubricant line now has the leading market share in the Mercosul countries, with 18 percent of the combined markets of Brazil, Argentina, Paraguay and Uruguay. The runner-up, Chevron, has 17.7 percent, Shell 12 percent, and Exxon 9 percent market share, the Rio de Janeiro-based company said.

The statement was based on market data from the end of 2005, published by the Agencia Virtual consultancy. Its study showed that Petrobras sales volume in the region grew 36 percent from 2003 to 2005. Renato C.T.M. de Oliveira, lubricant business manager at Petrobras, told that the Lubrax brand grew significantly in Brazil during 2005, in part because sister company Petrobras Distribuidora S.A. acquired AGIP do Brasil and absorbed its lubricant business.

In Argentina, he added, where Lubrax started local production in January 2002, we had a 4 percent market share. Last year we reached almost 9 percent market share.

Latin America accounts for about 8 percent of total world demand for lubricants, and Mercosul accounts for half of that, de Oliveira said.

Kline: ExMo Outsells Shell

The number one marketer of finished lubricants worldwide? Its now ExxonMobil, says a recently published study by Kline & Company. Sales of ExxonMobils lubricant products topped 4.5 million metric tons in 2005, earning a 12 percent share of the global lubes market and nudging past Shell for the top spot. Former first-place holder Shell took second place in Klines annual ranking, with 11 percent of global volumes. The consulting company put the total size of the lubricant market at 37.9 million tons last year.

Shell had been the market leader since its 2002 acquisition of Pennzoil-Quaker State. For 2005, ExxonMobil won out in terms of volume, thanks to their increased market share in the U.S., particularly in the factory fill and private-label segments, said Geeta Agashe, director of the Petroleum and Energy Practice at the Little Falls, N.J., consultancy. Neither company discloses lubricant sales data, so rankings are based on estimates by outside parties.

Shell remains the leader in sales of branded lubricants, which tend to have higher profit margins, Kline noted. Its study, Competitive Intelligence for the Global Lubricants Industry, 2005-2015, put BP in third place worldwide, with 8 percent of the market in 2005. Rounding out the top 10 were Chevron, Total, PetroChina, Sinopec, LukOil, Fuchs and Valvoline. One notable newcomer to its list of the top 20 companies is Tongyi Beijing Petroleum Chemical Co., a privately owned lube blender that has seen rapid growth in Chinas fast-expanding market. Kline placed Tongyi at 16. Web:

Cristiano Launches Consultancy

After 30 years of experience in developing and marketing industrial lubricants and metalworking fluids, Tony Cristiano has created A.G. Cristiano LLC, a new consulting firm serving lubricant formulators and marketers. Cristiano, who retired earlier this year from specialty additive supplier Rhein Chemie, aims to advise clients in the areas of marketing, formulation, product development, and product portfolio management. Other areas of specialized expertise include hydraulic fluids, turbine oils and slideway lubrication. E-mail: TonyCristiano4u@

Hercules, Uniqema Stay Tight

Hercules Inc. and Uniqema have agreed to extend their longstanding synthetic lubricants manufacturing agreement. The agreement covers Hercules production of the Emkarate RL branded polyol esters, which Uniqema sells as lubricants for refrigeration and air conditioning compressors. Terms of the multi-year agreement were not disclosed, but Hercules said it will expand its Louisiana, Mo., plant to accommodate the agreement.

We anticipate the expansion of our synthetic lubricants capacity will be completed by the second quarter of 2007, said Paul Raymond, president of Hercules Paper Technologies and Ventures, in Wilmington, Del. The two companies have had a manufacturing agreement since the mid-1990s. Rick Hanson, vice president of sales at Uniqema in New Castle, Del., pointed out that the global refrigeration and air conditioning market is growing, and added that the deal also supports Uniqemas Icematic polyol ester business, which it recently acquired from BP.

Uniqemas parent, ICI Group, agreed in late June to sell the company to Britains Croda International, for $758 million and assumption of debt. The sale was expected to be completed in the third quarter.

Technical Expertise on Tap

Based in the U.K., Covey Consulting Ltd. is a new firm formed to support the petroleum additive, lubricants, fuels, testing and motor industries. Managing Director David Covey has a wide range of contacts and is well known from his work at Shell and Infineum. The consultancy offers strategic advice and guidance on technical trends and business dynamics; analysis and interpretation of technical information and trends; support and promotion of clients business; and representation on industry panels, committees and groups. E-mail: David@DavidCovey.

Faces in the News

Jay Flint has been named president of Nynas USA Inc., the Houston based subsidiary of global naphthenics producer Nynas, of Stockholm, Sweden. Flint joins Nynas from Kraton Polymers; prior to that he was with Shell for 24 years, serving in sales and marketing, operations and corporate planning.

Lloyd Nelson has joined Tarrytown, N.Y., based Ciba Specialty Chemicals, as technical promotion manager for its process and lubricant additives team. With a Ph.D. in organic chemistry, Nelsons experience includes lab management, technical support and product development positions at Mobil Oil and most recently Arizona Chemical. George Psillas, formerly of BP/Castrol Industrial Americans, also joined Ciba, as technical sales representative, and Jacqueline Russo, who joined Ciba in 2000, was named technical sales representative and distribution partner coordinator for the U.S. Market.

Carl Kernizan has joined independent blender and greasemaker Jesco Resources, North Kansas City, Mo., as technical director, bringing a background in advanced lubricant research and product development. A 15-year industry veteran who holds a Ph.D. In physical chemistry, he comes to Jesco from Lubrizol, where he was an industrial product manager.

Dean Bostic has been promoted to national sales manager of Acme-Hardesty Co., responsible for managing and developing its sales team and strategies. Bostic joined the Blue Bell, Pa., reseller of oleochemicals and specialties in 2000, and most recently was a business group manager there.

Des-Case Corp., of Whitehouse, Tenn., has welcomed Melanie Gardner as customer service manager, responsible for all domestic and international customer service activities, including managing technical support. Also, Jon Bergman joined the company as business development manager, to focus on increasing sales for the companys breather products and oil handling equipment.

Coming Events

October 23-25. International Joint Tribology Conference, San Antonio, Texas. Hundreds of top researchers are expected at this annual forum, co-sponsored by STLE and ASME, and featuring more than 200 technical papers related to all aspects of tribology – the science of friction, lubrication and wear. New this year is an exhibition showcasing leading global companies, including lab and testing equipment makers, publishers and research organizations. View abstracts or register online at

Oct. 28-31. NLGI 73rd Annual Meeting, Orlando, Fla. Harvey Golubock of American Refining Group will deliver the featured industry address at this prestigious event, which also features dozens of peer-reviewed technical papers on lubricating grease technology, manufacturing, marketing and opportunities. The meeting also offers education courses, working group meetings, exhibits by industry suppliers, and social events. Register on the web at

Nov. 9-10. NPRA International Lubricants & Waxes Meeting, Houston, Texas. What critical issues will the global industry face in 2007? Where are the best opportunities for lubricant marketers? How do heavy-duty OEMs view todays engine oils? Find the answers at this key annual event, attended by lube marketers, importers, base oil producers, refining engineers, and additive suppliers. Visit

Nov. 17. Environmental Mycobacteria Seminar, St. Louis, Mo., jointly sponsored by Microbe Inotech Laboratories, Combimatrix, and Arkema. Speakers from both industry and academia will cover environmental mycobacteria issues, in a program designed for environmental project engineers and managers, health and safety personnel, regulatory officials, metalworking fluid suppliers, wastewater microbiologists, laboratory specialists and others who need a grasp of microbiological principles for decision-making. Register early as space is limited. Web:

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