Los Angeles, CA (PRWEB) June 17, 2013
The Lubricant Oil Manufacturing industry produces industrial and automotive lubricants for manufacturers and consumers, including motor oil, transmission fluid, rust inhibitors and machine oils. The industry experienced its share of wear and tear during the Great Recession, which led to a downturn in consumer income and downstream manufacturing activity. These factors compelled consumers to drive less and hold off on car expenses, while downstream manufacturers were forced to leave factories idle or exit their industries. As a result, fewer lubricant products were purchased during the recession and industry revenue dropped 10.8% in 2009. In addition, strong refining capacity expansions prior to the recession resulted in production outweighing demand when the economy tanked. The downturn in demand and profitability forced some players out of business, with the number of enterprises operating in the industry falling at an annualized rate of 2.4% from 2008 to 2013 to 342 companies. However, strong demand after the recession resulted in overall positive growth from 2008 to 2013, with revenue expected to increase at an average annual rate of 3.9% to $18.7 billion, says IBISWorld industry analyst Sean Windle. Much of that growth took place in 2010 and 2011, with revenue climbing 10.1% and 18.6%, respectively. After the industry's postrecession boom, revenue growth slowed in 2012, and is expected to reach 1.7% in 2013.
The Lubricant Oil Manufacturing industry consists of a relatively modest number of firms, with major oil companies (ExxonMobil Corporation, Royal Dutch Shell, Ashland Inc. and BP PLC) representing the largest players, continues Windle. IBISWorld estimates the industry has a medium level of concentration. In addition, these firms play a further role within the industry, supplying lubricating oil base-stock to other specialist lubricant producers. Concentration has increased over the past five years with Shell's $4.5-billion purchase of East Resources Management LLC in 2010. The acquisition consisted of oil and gas properties located in the Marcellus Shale region in the Northeast United States.
The long-term outlook is positive for the industry, though. After an impressive postrecession comeback, revenue will continue to grow, as improving economic conditions bolster demand from downstream manufacturers. Revenue will also benefit from rising oil demand from consumers, as the number of cars on the road and the number of miles driven increase. For more information, visit IBISWorld’s Lubricant Oil Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry manufacture petroleum products (except for asphalt paving, roofing and saturated materials), such as blended motor oils, brake fluids, lubricating grease and other oil-based additives. Key buyers include downstream automobile manufacturers, wholesalers and automotive retail chains.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.