US Lubricant Demand to Reach $22 Billion in 2014

US demand for lubricants is forecast to expand 1.3 percent annually to 2.25 billion gallons in 2014, valued at $22 billion.  This represents a significant improvement over the performance of the 2004-2009 period, when lubricant demand declined 5.0 percent annually.  A turnaround in motor vehicle production, along with an acceleration in the number of automobiles in use, will support demand for automotive lubricants.  Additionally, increased manufacturing output will drive demand for industrial lubricants.  However, total lubricant consumption is not expected to reach pre-recession levels.  This will largely be due to the greater use of longer-lasting, higher-performing synthetic lubricants which extend drain intervals, therefore reducing overall lubricant requirements in volume terms.  Average price increases will continue to be significant due to expected growth in crude oil prices and a shift in product mix toward higher-value lubricants. These and other trends, including market share or product segmentation, are presented in US Lubricants, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Engine oils accounted for more than half of total US lubricant demand in volume terms in 2009.  A significant rebound in motor vehicle output following the double-digit annual declines of the 2004-2009 period will propel engine oil demand in the factory fill segment.  However, this represents only a small fraction of engine oil demand, and the overall outlook for these products in volume terms will be restricted by lengthening oil change intervals and the use of high performance synthetic lubricants.  As such, aftermarket demand will decline, with the “do-it-yourself” segment continuing to lose out to “do-it-for-me” (DIFM) services, a trend which stalled in 2008 and 2009 as drivers sought out more economical alternatives for their vehicle service needs in the midst of difficult economic times. 

Process oils -- which include white oils, rubber oils, electrical oils, ink oils, agricultural spray oils and defoamer oils -- represent another leading lubricant category.  Demand for these products is forecast to advance at the most rapid pace, promoted by rebounding manufacturing activity following the real (inflation-adjusted) declines of the 2004-2009 period.  In particular, an improved outlook for food and beverages, chemicals, and plastics and rubber will offer good opportunities for growth.  However, process oils will continue to encounter challenges brought about by changing environmental and regulatory standards.

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.