Synthetic Lubricant and Functional Fluid Demand to Reach $4.8 Billion in 2013

US demand for synthetic lubricants and functional fluids will expand more than three percent per year to $4.8 billion in 2013, with growth rising at an even faster pace in volume terms to reach 520 million gallons.  Engine oils and hydraulic and transmission fluids will experience the fastest gains as synthetics finally begin to penetrate the conservative medium and heavy duty truck market, and as increasing new vehicle lubricant performance requirements and growing consumer acceptance further expand synthetics’ share of the light vehicle market.  While engine oils and hydraulic and transmission fluids will achieve relatively strong growth going forward, other types of synthetic lubricants and fluids are expected to realize a slow decline in demand through 2013, largely as a result of falling average fluid prices. These and other trends, including market share and product segmentation, are presented in Synthetic Lubricants & Functional Fluids, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

The largest market for synthetic lubricants and functional fluids is light vehicles.  This reflects not only consumer uptake of engine oils and transmission fluids, but also the universally synthetic nature of antifreeze, brake and deicing (windshield wiper) fluids.  The fastest growing market for synthetic fluids will be the medium and heavy duty truck market.  Increasingly stringent engine specifications, as well as a move by many engine manufacturers to specify low viscosity engine oils for their 2010 emissions-compliant engines, will finally lead many fleet operators to evaluate and use synthetic engine oils and hydraulic and transmission fluids.  Synthetics will benefit from their better performance under load in low viscosity formulations, as well as from the reduced maintenance and downtime costs that result from synthetics’ extended drain intervals.  The latter will be increasingly important to fleet operators looking to cut costs.

From a product standpoint, the greatest declines will be in heat transfer and metalworking fluids.  In addition to declining vehicle antifreeze demand, the greater use of fill-for-life coolant systems in industrial equipment and the increased recycling of deicing fluids at airports will contribute to falling heat transfer fluid demand.  Synthetic metalworking fluid demand will suffer from increasing substitution of bio-based fluids for synthetics.  Reflecting their heavy use in engine oils and hydraulic and transmission fluids, Group III base oils and polyalphaolefins will be the fastest growing synthetic chemicals, with esters also achieving positive value growth through 2013. 

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.