Global consumption of lubricant additives is set to grow 2.2 percent per year, from 4 million metric tons in 2012 to 4.5 million tons by 2017, consultancy Kline & Co. projects. Even at that mild rate, additive consumption will grow faster than the 1.7 percent annual growth rate projected for finished lubricants.
In its new study, Global Lubricant Additives: Market Analysis and Opportunities, Kline values global lubricant additive consumption at $13.3 billion in 2012. The study looks at additive demand by function class, including dispersants, detergents, viscosity index improvers, antiwear agents, antioxidants and many more. It also covers additive demand for specific automotive and industrial products: passenger car and heavy-duty engine oils, transmission fluids, gear oils and tractor hydraulic fluids; metalworking fluids; general industrial oils; lubricating greases and more.
Upshi Ghosh, project manager for Klines energy practice, gave a preview of the studys findings in a late February webinar. By function class, she revealed, Kline expects antioxidants to enjoy the fastest volume growth, at 4.9 percent per year to 2017, followed by dispersants at just under 3 percent, V.I. improvers a little over 2.5 percent, and pour point depressants around 2.4 percent. Several additive types (emulsifiers, antiwear agents, detergents) will grow more slowly than the rest, but they will grow.
Where do these additives go? The top lubricant categories for additives consumption in 2012 were heavy-duty motor oil, accounting for 33 percent of global demand, followed by passenger car motor oil at 27 percent, Kline found. Additives used in other automotive lubricants accounted for 7 percent.
Over on the industrial side of the lubricants family, additives for metalworking fluids led with 14 percent of total demand, followed by industrial engine oils with 13 percent.
Just three functional classes – dispersants, V.I. improvers and detergents – accounted for 70 percent of all additives consumed in 2012. They were followed distantly by antiwear agents, antioxidants, corrosion inhibitors and friction modifiers, emulsifiers and other types.
The 10% Solution
Kline, which is based in Parsippany, N.J., has pegged global consumption of finished lubricants at 39 million tons in 2012. And comparing overall finished lubricant consumption with the overall additive consumption, what we see is the global additive consumption accounts for roughly 10 percent of the global lubricant consumption, Ghosh said. (To avoid double counting, she noted, the study excluded aftermarket oil additives.)
PCMO and HDMO take the lions share of global additive demand, not surprising since they together account for 46 percent of global lubricants demand. More impressively, these products require a whopping 60 percent of the additives sold, due to more additization in HDMO and PCMO products, as compared to industrial products, Ghosh pointed out.
Looking at these key product categories more closely, she noted that HDMO in 2012 consumed 33 percent of overall additive demand globally. By function class, about 38 percent of the HDMO additive package is dispersants, 26 percent is V.I. improvers, and 23 percent is detergents. Antiwear agents are 8 percent and antioxidants just 4 percent.
This mix could be changing though, Ghosh indicated, as key drivers for future HDMO additive consumption include increasingly stringent limits on tailpipe emissions, the shift to higher-performing oil categories and multigrades, and extended drain intervals.
As well, she noted, the ACEA 2012 European Oil Sequence is tuned towards providing some degree of biodiesel compatibility. The increasing penetration of biodiesel has led to increased use of antioxidants in these lubricants to handle sludge, acids and oil thickening issues, Ghosh said. Growing use of biofuel in North America means this same need is on the wish-list for the PC-11 heavy-duty engine oil upgrade, due in 2016 for North American trucks.
Extended drain intervals is another trend in HDMO. To make engine oils more durable, she noted, an up-treat of antioxidants and dispersants will be required.
As the market shifts towards fuel-saving multigrades and away from heavy-duty monogrades (which are still 33 percent of global HDMO demand), it will spur greater need for viscosity index improvers, dispersants and antioxidants, she said. Kline projects that HDMOs need for V.I. improvers and dispersants will grow faster than 3 percent a year, while antioxidant consumption will rev beyond 6 percent a year through 2017.
Dialing Up FM
In the PCMO market, Ghosh said, V.I. improvers were the leading function class of additives, at 41 percent in 2012. Second was dispersants (31 percent) and third was detergents (11 percent).
Global trends affecting lubricant formulation and additives demand include the introduction of new specifications such as ILSAC GF-5 and GF-6 and ACEA 2012. While it may be complete in North America, she pointed out that the shift from GF-4 to GF-5 is still under way in many developing countries, and that should give a boost to the consumption of additives such as antioxidants and friction modifiers.
The next category upgrade, to GF-6 oils starting in early 2017, she suggested, will not have as significant an impact on additives though, as what we saw going from GF-4 to GF-5. GF-6 formulations even could see some reduction in the share of detergents needed in their additive package.
The trend towards lower viscosity PCMO (and especially to fuel-saving grades such as SAE 5W-XX and 10W-XX) will also have an impact on additives. As the market continues to shift towards lower viscosity grades, there will be an increasing use of friction modifiers, Ghosh forecast. Kline sees friction modifiers growing about 6 percent a year through 2017 – albeit from a pretty small base (just 2 percent of PCMO additive demand in 2012).
Extended drain intervals for PCMO will require increased oil durability. Extended drain intervals have a direct impact on increasing dispersant and antioxidant treat rates in PCMO formulations, she said. For antioxidants, this could mean growth of better than 6.5 percent a year to 2017.
Sharp Appetite in Metalworking
Metalworking fluids are a mere 6 percent of the worlds consumption of lubricants, but they have an enormous appetite for additives, Klines research shows. Overall, they account for 14 percent of the global additives market, reported Ghosh.
Corrosion inhibitors are the number one type of additive used in metalworking fluids worldwide, 25 percent of the total. They are used at high treat rates, especially in the synthetic and soluble oils that are growing in popularity. Next come emulsifiers (22 percent of metalworking fluid additive demand), lubricity additives (18 percent) and extreme-pressure and antiwear additives (16 percent). Buffering agents, biocides, metal deactivators and other specialties make up the rest.
In metalworking fluids, reformulations are traditionally driven by various health, safety and environmental factors, Ghosh said, and this continues to be the case, starting with the Global Harmonized Standard that aims to make all products safety data sheets conform to the same mold worldwide. This regulation has metalworking fluid suppliers everywhere scrutinizing their formulations and scrubbing out any chemistries that may raise concern from buyers.
For example, this is forcing out the use of chlorinated paraffins as EP additives, she went on. Kline foresees formulators continuing to eliminate harmful or suspect substances such as diethanolamine, formaldehyde-releasing biocides, endocrine disrupting chemicals and others.
Another issue these formulators face is the trend towards greater use of paraffinic API Group II and Group III base stocks, Ghosh said. Although these can be unsatisfactory as far as metalworking is concerned, their availability is growing, in contrast to traditional base oils. The use of Group II and III base stocks may require more additives to make them suitable for metalworking. But just as we previously saw the decline of naphthenic stocks, we are now seeing the decline of Group I refining, she explained. So formulators are forced to use what they can get.
In some cases, that may be vegetable oils or synthetic esters, she added. These are growing in use, too, and also require formulators to rethink their additive toolkit.
Overall, Kline expects metalworking fluid consumption to grow just 1.2 percent a year through 2017, and says their additives will pretty much track that modest rate of growth.
In the Industrial Zone
In contrast to engine oils and metalworking fluids, general industrial oils – which in the Kline study includes industrial hydraulic fluids and gear oils, turbine oils, compressor and refrigeration lubes and others – are lightly additized. These products make up 8 percent of global finished lubricants consumption – but only 4 percent of the entire additives market, said Ghosh.
Here too, health, safety and environmental issues are paramount for formulators, who must strive to adopt more environmentally acceptable additives while meeting OEM demands for longer drain intervals. The outlook is tepid – the study suggests general industrial oil volumes will grow barely 1.5 percent a year – but there are some hot spots.
If you look at the hydraulic fluids market and the additives for hydraulic fluids, youll see a trend towards low-zinc and ashless products, Ghosh said. Kline expects zinc-free fluids will boom in the coming years, going from 7 percent of the total hydraulic fluids market in 2012 to 12 percent in 2017. Ghosh said, This will have a negative effect for zinc additives, as zinc-free fluids will require lessened antiwear treat rates.
More brightly, demand should continue to rise for fire-resistant hydraulic fluids, and that will lead to greater use of corrosion inhibitors, V.I. improvers and emulsifiers. Especially for ester based fluids, the treat rate for emulsifiers is very high, she observed, leading Kline to predict better than 2.5 percent annual growth for emulsifiers in general industrial oils through 2017.
As industrial equipment puts greater stress on lubricants, with smaller sump sizes, higher loads and longer service intervals, additive demand will tick up, too. In extreme-pressure gear oils, for example, more EP additives such as sulfurized olefins will be needed, Ghosh said.
Finally, the turbine oil market also is facing issues of performance in terms of higher pressures, higher temperatures, and higher loading, Ghosh said. Increasingly, oxidation control is perceived by turbine oil users as an indicator of quality. So the use of antioxidants is likely to grow in this application, too.
Lisa Tocci contributed to this article.