US Lubricant Demand to Reach 2.5 Billion Gallons in 2012

Demand for lubricants in the US will reverse its decline and increase nearly one percent per year to 2.5 billion gallons in 2012, growing off a weak base. Market value will approach $17 billion, an annual increase of more than four percent from 2007. Advances will largely be a result of climbing demand for engine oils, which will benefit from the increasing number of motor vehicles in use.  Additionally, growth in the manufacturing sector is expected to fuel demand for industrial lubricants such as hydraulic fluids, process oils and greases.  However, volume gains will be restricted by trends toward longer-lasting lubricants, which extend oil drain intervals and reduce overall lubricant requirements.  These and other trends, including market share and product segmentation, are presented in US Lubricants, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Demand for engine oils -- which accounted for nearly half of total lubricant demand in 2007 -- will be boosted by the increasing number of motor vehicles in use, although this will be offset somewhat by trends toward smaller automobiles and less frequent oil changes.  The “Do-It-For-Me” engine oil change market will continue to benefit from the decline in the “Do-It-Yourself” market as aging baby boomers continue to change sectors. Dealerships are expected to benefit the most from this switch as they use oil changes as a loss leader to attract customers for the more profitable repair work. Above average engine oil demand is also expected to come from the agricultural sector and the construction industry.

Demand for process oil -- which includes white oils, rubber oils, electrical oils, ink oils, agricultural spray oils and defoamer oils, among other products -- is forecast to lag overall lubricant demand.  Although process oils are often incorporated into the finished product, making them less vulnerable to factors such as recycling and extended drain intervals, some weakness in key markets such as cosmetics and toiletries and inks is likely to dampen gains.  Demand for transmission and hydraulic fluids is projected to reverse recent declines, although growth will be below average for the industry due to changing standards for automatic transmission fluids, which will continue to  increase drain intervals.

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.