Lubricating Oils and Greases: A Global Strategic Business Report
San Jose, California (Vocus/PRWEB) February 10, 2011
Economic, regulatory and political issues are rewriting the demand and supply dynamics of the worldwide lubricating oils and greases market. While developed markets have moved into the maturity stage, developing markets project bright future for lubricants. The recession has taken its toll on the world lubricating oils and greases market with acute exposure to economic hardships softening growth during the years 2007 through 2009. Lubricant oils are heavily dependent upon end-use industries like automotive, construction, transportation, and industrial machinery, all of which witnessed significant disruptions in business activity. As a result, industrial, commercial, and consumer lubricants witnessed steady deterioration in business climate.
The meltdown in the construction industry and the sharp decline in new construction projects translated into lower lubricant oil consumption in the construction industry. The financial crisis led economic recession has come down especially hard on the transportation industry including the marine transportation sector, thus crippling the commercial lubricants sector. The slowdown in freight hauling, trucking and logistics pinched demand for specialty heavy-duty motor oil (HDMO). Marine shipping withstood the maximum impact with freezing of consumer spending in the United States and slowing levels of economic activity resulting in the collapse of global production & trade. The breakdown in trade activities in turn resulted in a large number of ships anchored empty and idling in harbors and ports, thus indirectly impacting sales of marine lubricants. The recession has made a disproportionate impact on industrial production, and the marked decline in manufacturing output resulted in reduced machine operating hours thus reducing the consumption of machine oils, hydraulic oil, way oil, gear oil, spindle oil, heat treatment oil, and rust preventive oil, among others. Demand for metalworking fluids is typically driven by manufacturing of base metals and formed metal and fabricated metal products i.e. structural steel, automotive body panels etc, and the slowdown in manufacturing output, not surprisingly impacted demand for metalworking fluids. The slump in new car sales displaced investments in automotive production resulting in plant closures, capacity idling, scaling back of operating capacity, all of which played instrumental roles in dragging down opportunities for process oils/fluids, and OEM-specific factory fill lubricants. Given its extreme sensitivity to automotive production and sales, factory-fill lubricants declined steeper than service-fill lubricants.
Consumer automotive lubricants witnessed a cushioned fall in comparison as fuel prices are subsidized in most countries and car purchases are incentivized by most governments. Downward revisions of fuel prices, although temporary, prevented any steep declines in car driving. Nevertheless, the market witnessed lower volume demand at aftermarket service levels for crankcase oils, power steering fluid, engine coolant, transmission and axle lubricants and fluids for hydraulic torque converters, as a result of reduced frequency of maintenance and repair, and stretching of preventive maintenance schedules, which resulted in reduced engine oil changes. Lower disposable incomes and higher fuel prices have kept consumers off-road with the passion for SUVs cooling thus exacerbating the decline in vehicle miles driven.
With the recession now at its tail end, a gradual and steady recovery is forecast to be on cards. The post recession period will witness demand for lubricants and greases shift from the developed markets towards the developing markets, especially the BRIC countries, in parallel to the migration in production, manufacturing activities. In addition, demand is forecast to be especially high for premium quality fluids, as the automotive industry continues to be overturned by issues pertaining to energy conservation, efficiency and emission regulations. Consumer preferences are expected to shift towards lower viscosity grade, fuel-efficient oils. The recession has interestingly induced a long-term shift in consumer perception towards performance, price and value offered by products, which is expected to linger on even into the post recession period. Thus products that offer the highest price/performance benefits are poised to score the maximum gains. Investment in new technologies is therefore expected to gain fresh momentum as players continue to maximize product performance benefits.
As economic health begins to align with environmental health, the lubricants and greases market will witness a distinct focus among both, manufacturers and end-users on reducing the environmental footprint of lubricant consumption. Technology development in the industry in the medium-to-long term will be driven by the concept of “sustainability” to minimize pollution and maximize resource utilization. As a result, commodity lubricants, which more often than not, fail to meet the growing demand for extended service life, and higher drain period will witness steady replacement by new generation lubricants. Although the market will continue to witness robust opportunities into the foreseeable future, given the fact that lubricants and greases are a necessity and a vital commodity in the mechanical world, volume consumption trends are at the helm of a major transformation. As environmental concerns and technological innovations double up, volume consumption is forecast to slide, while revenues continue to strengthen, marking the emergence and proliferation of expensive, high quality, durable lubricants with extended drain intervals. Per capita consumption of lubricant is forecast to fall across all geographic markets. North America, despite growth in GDP, has already been witnessing a decline in per capita consumption of lubricants from 28.9 kilogram in 2000 to 19.5 kilogram in 2009 largely as a result of inroads made by high quality lubricants, which have resulted in substantial reduction in the frequency of lubricant purchases.
As stated by the new market research report, Automotive Lubricants represents the largest product segment. Engine Oils represent the largest volume contributor in the automotive lubricants market. Industrial Lubricants remains another prominent segment.
Major players in the marketplace include BP Plc, BP Lubricants USA Inc., Castrol BP Petco Ltd., Chevron Corporation, ConocoPhillips Lubricants, Exxon Mobil Corporation, Esso S.A.F., Fuchs Petrolub AG, Idemitsu Kosan Co. Ltd., Indian Oil Corporation Ltd., LUKOIL Oil Company, JX Nippon Oil & Energy Corporation, Petróleos de Venezuela S.A., PT PERTAMINA (PERSERO), PT Wiraswasta Gemilang, Repsol YPF SA, Royal Dutch Shell Plc, Shell Oil Company, SOPUS Products, Sinopec Corporation, Total S.A., and Valvoline.
The research report titled “Lubricating Oils and Greases: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends and issues, consumption patterns, and recent industry activity. The study also provides market estimates & projections in volume sales for all major geographic regions such as United States, Canada, Japan, Europe, Asia-Pacific, Middle East, and Latin America by the following product groups/segments - Automotive Lubricants (Engine Oils, and Transmission & Hydraulic Fluids); Industrial Lubricants (General Industrial Oils, Industrial Engine Oils, Marine Lubricants, Metal Working Oils, and Process Oils); and Greases.
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