Global Functional Fluids Market to Reach US$19.7 Billion by 2017, According to New Report by Global Industry Analysts, Inc.

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GIA announces the release of a comprehensive global report on Functional Fluids markets. Global market for Functional Fluids is projected to reach US$19.7 billion by the year 2017. Opportunities in the market will be driven by innovation that meets changing regulatory requirements and standards for sustainability and performance. Drop-in biosynthetic functional fluids are forecast to witness the highest gains in the upcoming years, against a backdrop of the "greening" process underway in the industry.

Functional Fluids: A Global Strategic Business Report

Follow us on LinkedIn – Functional fluids are omnipresent products that find widespread use in a wide range of applications spanning the length and breadth of myriad industries worldwide. Given that modern life crucially depends on fuel-driven machines and technology systems, market for functional fluids, which are defined as machine fluids that enable smooth functioning of machines, is forecast to continue to witness steady growth. In the upcoming years, a crucial variable for product success in the marketplace will be the cost to performance balance. Innovation also ranks as important as companies will need to keep pace with technology developments in the equipment/machinery industry.

With efficiency and productivity being primary goals of the manufacturing and industrial sector, several industrial processes and associated equipment are currently being manufactured to allow faster processing and thus are designed to operate at higher temperatures. This thereby requires functional fluid manufacturers to manufacture more thermally, oxidatively stable and less volatile fluids for use in these machines. Also, stringent test protocols for assessing environmental acceptability of the fluids creates challenges for manufacturers to develop fluids that conform to legislated parameters pertaining to toxicity, biodegradability, bioaccumulation, lower emissions and recyclelability. Growing popularity of asset management programs in industrial/manufacturing plants designed to enhance data transparency about maintenance, financial return on interests and operational functions is poised to benefit the market for functional fluids. This is primarily because routine maintenance programs leads to increased frequency of fluid change.

Supported by advantages such as superior efficiency, quality, performance, and safety features, synthetic functional fluids will continue to wax in popularity at the expense of mineral-based functional fluids. Synthetic fluids perform relatively better under load in low viscosity formulations and can provide fire resistance, lengthen drain intervals, and improve equipment protection. Synthetics fluids will increasingly be used in medium/heavy-duty truck, process oils and hydraulic & transmission fluid applications. In the transportation industry, increased performance requirements from new vehicle lubricants will heighten the role of synthetics in preventative maintenance programs. The growing acceptance of synthetics in light vehicles additionally augurs well for the market.

Demand in the automotive functional fluids market is poised to benefit from recovering auto production, new vehicle sales, increase in vehicle population, increase in average operating life of passenger cars and commercial vehicles, rise in the number of vehicle miles travelled and increased focus and spending on maintenance. To tap into the opportunities offered, players are knitting strategies around building brand awareness, brand value, brand loyalty and aggressive promotion. Demand for hydraulic fluids, on the other hand, stands to benefit from the spiraling increase in the installed base of hydraulic equipment in industries spanning aerospace, construction, farming & agriculture, mining and oil & gas industries, among others. Increased infrastructure spending by developing countries is poised to benefit the hydraulic equipment industry which in turn will generate opportunities for hydraulic fluids. Equipment replacements will additionally drive demand in this space.

Growing emphasis on preventing expensive hydraulic equipment failures, is leading to increased frequency of checking fluid levels in machines and maintenance of fluid cleanliness, thus positively impacting demand. In the upcoming years, biodegradable hydraulic fluids, also known as bio-based fluids based on vegetable oils, such as, canola, rapeseed, sunflower, soybean, is expected to witness strong growth in sync with technical improvements. Increasing production output and favorable manufacturing indices, especially in developing countries, and recovering economic activities and the rise in demand for metal commodities, bodes well for the growth of process oils, heat transfer fluids, and metalworking fluids. The growing demand for heat exchangers and their omnipresent use is also expected to create opportunities for heat-transfer fluids used in heat exchangers.

The functional fluids market is dependent on industrial production, manufacturing output, automotive production, mining and construction activities, oil & gas exploration, fuel processing, metals, oils, and minerals industries. While key end-use markets are recovering the world over from the 2007-2009 recession, the industries in Europe are running into fresh set of challenges. EUs industrial sentiment currently remains torn between optimism and fear, given the mixed signals emanating from the volatile manufacturing data in Spain and Italy and the encouraging industrial performance in Germany. Bearish market sentiments indicate that an escalation in the euro crisis could precipitate a slowdown in the market. Also the shift from fiscal government stimulus to anti-crisis austerity and spending cuts as a measure to tame the towering public debt scenario could impact capital expenditure in manufacturing industries in debt affected economies by limiting borrowing and reducing investments in capital goods. Reduced ability of the government to fund capital expenditure can impact both domestic and foreign financed projects thus indirectly influencing spending on machinery solutions including functional fluids.

However, despite the challenges and uncertainties, over the continued economic stability in Europe, most market indicators for the immediate-term future feature a largely positive outlook for the manufacturing industry in the year 2012. Manufacturing production which continued to recover from 2010 through 2011 is expected to continue into the year 2012. For instance, in Germany industrial/manufacturing output is holding well as indicated by the country’s yet strong export market, a key reason for the country’s superior handling of its debt crisis in comparison with Greece, Portugal, Spain and Italy. Also, capital goods orders from developing countries have been standing up to the pressure providing a glimmer of hope for steady long-term growth in the region. In the domestic automobile industry, immediate production cutbacks are not seen as likely, given the yet patchy slowdown in auto sales. The odds are in favor of the automobile industry given the current guarded optimism over the government’s latest attempts to rein in the debt crisis, which in effect discounts the impact of a possible Eurozone crisis, which is still not confirmed as a technical recession. Currently, however production continues to hold up even in the face of weaker than expected growth and optimism remains with no downgrade in the outlook for auto production. Against a backdrop of all of these factors, demand for functional fluids is expected to hold up in the year 2012.

As stated by the new market research report on Functional Fluids, Europe, Asia-Pacific and United States dominate the world market. Asia-Pacific is forecast to witness the strongest growth of 3.6% over the analysis period 2009 through 2017.

Major players in the marketplace include BASF SE, BP PLC, Chem-Ecol, Chevron Corp., CLC Lubricants Co., Croda International, Dow Chemical Company, Dow Corning Corp., ExxonMobil, Fuchs Petrolub, Gulf Oil Limited Partnership, Hatco Corp., Houghton International, Idemitsu Kosan Co., Ltd., J.D. Streett & Co., Inc., Kluber Lubrication Munchen KG, Parker Hannifin Corp., Permatex, Radiator Specialty, Royal Dutch Shell Plc, Warren Oil Company Inc., Yushiro Chemical Industry, among others.

The research report titled “Functional Fluids: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The report provides market estimates and projections (in US$ Millions) for major geographic markets including the United States, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, Russia and Rest of Europe), Asia-Pacific, Middle East, and Latin America. Product segments analyzed include Hydraulic and Transmission Fluids, Heat Transfer Fluids, Process Oils, Metal Working Fluids and Other Functional Fluids.

For more details about this comprehensive market research report, please visit –

About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.

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