CLEVELAND, April 27, 2016 /PRNewswire/ -- US demand for lubricants is projected to expand slightly to 2.4 billion gallons in 2020, with a market value of $23.5 billion. This will follow a period of modest growth between 2010 and 2015, during which time a number of industries associated with key lubricant markets rebounded from their recessionary lows. Going forward, a positive economic outlook will benefit lubricant demand, with rising manufacturing output and increasing commercial activity offsetting the adoption of longer lasting, higher performing products that facilitate longer drain intervals. These and other trends are presented in Lubricants, a new study from The Freedonia Group, a Cleveland-based industry research firm.
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Process oils and metalworking fluids, which are primarily used in manufacturing, are forecast to be the fastest growing product categories; however, expansion even for these products will be modest. Government regulation and consumer demand for "green" products will concentrate growth in re-refined and biobased lubricants. As drain intervals continue to extend, the lubricant industry will adapt to being value-driven, rather than volume-driven, by focusing on premium products such as synthetics.
"Transmission fluids, gear oils, and engine oils will be most affected by the lengthening drain intervals associated with improvement in fluid technology," notes analyst Minor Cline. Changing from a basic conventional lubricant to a premium synthetic product can potentially double drain intervals, depending on the application. Equipment owners will be drawn by the opportunity to lower their operating costs by reducing lubricant consumption. Synthetics will see significantly faster growth than conventional petroleum products where performance pressures are strongest, such as metalworking fluids and hydraulic fluids.
Biobased and re-refined products are expected to remain important growth niches. Although they are attractive as environmentally conscious alternatives, government regulations and economic incentives for purchase will be the key to expansion. Low oil prices have altered the short-term forecast for these products due to the difficulty of competing with mineral oil products on price. However, the long-term outlook is unchanged: growth in biobased and re-refined products will accelerate again as oil prices recover.
About The Freedonia Group – The Freedonia Group, a division of MarketResearch.com, is a leading international industrial research company publishing more than 100 studies annually. Since 1985 we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Each study includes product and market analyses and forecasts, in-depth discussions of important industry trends, market share information and profiles of the leading industry players. Reports can be purchased at www.freedoniagroup.com and are also available on www.marketresearch.com and www.profound.com.
SOURCE The Freedonia Group