The North American finished lubes market is showing signs of recovery, but it will not return to previous levels according to research consultants, Kline and Co.
In its latest report, Opportunities in Lubricants 2008-2010: North American Market Analysis, Vol. II: Consumer Automotive 2009, Kline reported a further decline in finished lubricant demand of 12% in 2009 at 2.6bn gallons, from close to 3bn gallons the previous year. However, the report predicts a slow recovery to around 2.9bn by 2014 followed by a flat market into the forseeable future.
According to the research, commercial lubricants fell by 14% with consumer demand down 14% compared to 2008. The US was by far the largest consumer, taking 85% of the total demand for North America, followed by Canada and then Mexico, with a predicted annual increase of 1.5% for finished lubes, 2.4% for consumer automotive and 3% for commercial automotive in the US to 2014.
While the big brands continued to lead the way with a 44% market share, this was 15% down on the previous year against the independent labels. While ExxonMobil led the US industrial market ahead of Chevron, they were overshadowed by Shell in consumer brands, with Valvoline and BP sharing second place.
In terms of viscosity grades, 5W-30 was the leading consumer oil last year with 5W-20 gaining ground. According to George Morvey, Kline’s Energy Practice project manager, quoted in Lubes Report, the popularity of the latter was primarily driven by Ford, Honda and Toyota's first fill programmes, with the 0W lubes offering strong future market opportunities.
Overall, as well as the recession, Morvey blamed a number of factors for the overall market decline. These included falling new vehicle sales, rising fuel prices, extended drain intervals and increased use of synthetics. He stated it was Kline's belief that the markets will not return to pre-2007 levels and that the current and predicted increases are mainly recovery in lost volumes rather than a significant market rebound.