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Asian Tide Lifts Metalworking Fluids


Consumption of metalworking fluids in North America, Asia and Europe reached about 2.1 million metric tons in 2010, valued at $6.9 billion, reveals a study from Kline & Co. Asia contributed 42 percent of this volume, North America 30 percent, and the remaining 28 percent came from Europe.

Together, the three regions can expect to see future demand growth for metalworking fluids of over 3 percent per year, hitting nearly 2.5 million tons in 2015. All three will enjoy some part of this improvement – but they shouldnt expect to share the gains equally, the Parsippany, N.J., market research firm indicated.

Asia, not surprisingly, will be the worlds fastest-growing metalworking fluids market, with 5 percent annual gains forecast from 2010 to 2015, said Milind Phadke, India-based project manager for Klines Energy Practice, during a recent webinar. And North Americas market will grow 2 percent per year over those five years, a definite improvement over the painful years since 2007.

By contrast, metalworking fluid volumes in Europe will expand only 1 percent annually – but that at least will be enough to bring this market into the black for the first time in three years. Strong manufacturing recovery in Germany and Russia, plus exports to Asia have helped buoy consumption, Kline research shows.

In Asia, the growth is driven by growth in manufacturing, not only catering to regional demand but also the shift that is happening with manufacturing relocating from high-cost economies to low-cost economies, Phadke explained. Much of the growth is still recovery from the baseline consumption level. But coming out of the recession, many of the governments in both North America and Europe are focused on shifting their economies from being overly dependent on financial and other services, and retaining whatever manufacturing strengths they have.

As a result, he said, some of the market shift to Asia may be dampened a little due to Western governments support of their own manufacturers.

Klines study is titled Metalworking Fluids 2010 Global Series: Market Analysis and Opportunities. Its June 29 webinar highlighted the three leading regional markets that were included in the full report: North America (including the United States, Canada and Mexico), Asia and Europe.

Since Klines last review of this segment in 2007, Asias metalworking fluid demand grew an average 3.3 percent per year, while Europes slipped 1.8 percent per year and North Americas contracted 7.8 percent per year.

Asia emerged much quicker and was less negatively impacted than Europe and North America in that three-year time frame, pointed out George Morvey, Klines U.S.-based project manager who conducted the webinar with Phadke.

North America

North Americas metalworking fluid demand amounted to 613,000 tons in 2010, according to the study. The United States accounted for 83 percent of this consumption, Canada for 11 percent and Mexico 6 percent.

The regions metalworking fluid market was fragmented though, Morvey said, with the top 10 suppliers accounting for just 55 percent of the market and barely any holding a double-digit market share. The market leader was Houghton International, with 12 percent, followed by Quaker Chemicals 10 percent and Henkels 7 percent. Fourth-place holder was Fuchs at 6 percent, and fifth was BP Castrol Industrial (5 percent). Rounding out the top 10 were ExxonMobil, Milacron, Metalworking Lubricants, Chemtool and Master Chemical.

Morvey noted that Houghtons market share in 2010 included product lines from D.A. Stuart Co., which it acquired in 2008, but did not reflect its February 2011 acquisition of Shells metalworking fluids and metal rolling oils business, which would have pumped up its volumes even further.

North Americas market for the past three years has been subdued, marked by significant contraction in production of automobiles and other transportation equipment, and in primary and fabricated metals and other machinery. This depressed the need for metalworking fluids, the webinar pointed out.


Asias metalworking fluids market amounted to 891,000 tons in 2010, and the region enjoyed demand growth of 3.3 percent a year over the past three years. Most of the important country markets in this region had a very shallow recession, Phadke remarked. They saw a downturn for maybe a year. Since then, they have been on the upswing.

Four countries consumed 90 percent of Asias metalworking fluids in 2010, he went on. China accounted for 43 percent of the regions metalworking fluids consumption, followed by Japan at 24 percent, India at 13 percent and Korea, 10 percent. All four of these markets have a pretty strong base in automotive manufacturing, as well as steel production, and manufacturing of machinery and other equipment, Phadke said. Other important Asian markets include Thailand, Vietnam and Indonesia.


Metalworking fluids consumption in Europe – including Western, Central, and Eastern Europe and Russia – totaled 601,000 tons in 2010, representing a decline of around 1.8 percent per year from 2007 to 2010. The market did decline due to the recession, but the overall decline was not as bad as one would expect, he said.

The European metalworking fluids market weathered the storm largely because of Germany (21 percent of the regions consumption in 2010) and Russia (23 percent). Both of them have seen a rebound in manufacturing, Phadke noted. In the case of Germany, this has been due mainly to exports to Asia. In Russia, its more due to internal demand linked to appreciating energy prices.

The Auto Factor

Global automobile production increased from 63.6 million units in 2004 to 71.7 million in 2007, and to 75.2 million in 2010.

Morvey noted the recessions impact on vehicle production and sales. For example, in North America in 2008, car and light truck production was 12.9 million units, he noted. That dropped to 8.8 million units in 2009.

In 2010, North American car and light truck production was back up to 12.2 million units. So there is light at the end of the tunnel, Morvey added. The region is starting to recover, which will be a positive for metalworking fluids demand as well as all other industrial and automotive lubricants.

In an update last month, Kline noted that North American markets continue to improve. In the United States alone, car and light truck manufacturing is up about 50 percent since the worst days of the recession, and the countrys output could reach 8.5 million units this year – far better than the 5.7 million built in the recessionary nadir of 2009. This resurgence in manufacturing will help drive demand for metalworking fluids as well as other industrial lubricants over the next few years.

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