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According to a new report from RnR Market Research, demand for lubricants in the United States is projected to increase less than 1 percent per year through 2018, reaching nearly 2.5 billion gallons. Improved efficiency and less frequent oil replacement will be a common trend throughout lubricant markets, serving to restrain demand.
Although growth is expected to be modest, this will represent a rebound from losses between 2003 and 2013 as manufacturing activity and economic growth pick up, supported by the country's improving energy outlook. Significant growth opportunities are also anticipated in key markets, such as construction, heavy-duty trucks, and oil and gas production, and for premium products throughout a variety of lubricant markets.
An ongoing shift toward longer-lasting, higher-quality lubricants is predicted in the light vehicle market, leading to declining total volumes despite good prospects for synthetic engine oils. Light vehicles hold a unique position as both the largest market for lubricants and the one most visible to consumers.
Improvements in vehicle technology and lubricant formulations will be rapid in this market, driven by an industrywide focus on greater fuel efficiency in cars and trucks. As the U.S. light vehicle fleet gradually moves toward cars calling for very high-quality, low-viscosity oils, these types of products will continue to gain favor.
Manufacturer and industry specifications, such as the upcoming ILSAC GF-6 and General Motors' current DEXOS standards, will be influential in promoting these trends, as will marketing efforts by lubricant companies seeking to promote high-value premium engine oils.
Better prospects for volume growth will exist in the construction, oil and gas, and machinery manufacturing markets. The U.S. construction industry is expected to continue a strong recovery through 2018 and will be among the fastest growing lubricant markets. The oil and gas industry, which has seen rapid growth in drilling and exploration since 2006, will continue to provide rising demand for lubricants in oil field and pipeline applications as well.
Natural gas prices are expected to remain low by historical standards through 2018, promoting a wide range of manufacturing and other industrial activity. Energy-intensive industries such as the production of metals, motor vehicles and machinery will all benefit. There will be implications for the electrical power industry as well, as greener energy sources such as natural gas and wind power supplant coal as preferred fuels.
Among product types, some of the best prospects will be for industrial and heavy-duty diesel engine oils, gas turbine oils and industrial hydraulic fluids. In most markets, opportunities will exist for premium products that can offer better lubrication, longer drain intervals or increased environmental friendliness. Overall, synthetic, re-refined and bio-based oils will substantially outpace conventional petroleum lubricants.
For more information, visit www.RnRMarketResearch.com.