Synthetic Lubricants Market - new study from Frost &
Sullivan
Demand for Synthetic Lubricants Helps Drive Global Investment in LAO
Production
28 August 2001
Around the globe, petrochemical companies are increasing their investment
in the production of Linear-Alpha Olefins (LAOs) in a bid to keep pace with
the growing demands of end-user industries. The fact that six facilities
are currently either planned or under construction (see table), including a
new 20,000 tonnes/yr. plant in the Far East recently announced by Idemitsu,
is testimony to this expansion. Europe's largest existing facility is BP's
Feluy plant in Belgium. A new study from international market analysts
Frost & Sullivan reveals that the growth in the synthetic lubricants
industry in Europe is driving some of this increased demand for LAOs.
|---------------+------------------|
| Region | No. of Facilities|
| | |
| | Planned |
|---------------+------------------|
| North America | 3 |
|---------------+------------------|
| Middle East | 2 |
|---------------+------------------|
| Far East | 1 |
|---------------+------------------|
Whilst all the base oil types used in the formulation of synthetic
lubricants will experience growth in the forecast period (2001-2007) it is
the poly-alpha olefins (PAOs) that will exhibit the fastest growth with an
estimated CAGR of 9.5%. And, PAOs are liquid oligomers of LAOs. The
growth in the PAO market is primarily being driven by the demands from the
4-stroke crankcase oil market. This demand is expected to remain strong
until a genuine alternative to PAO is commercially viable. The latest
poly-internal olefins (PIOs) which are cheaper to manufacture are still in
the developmental phase and so as yet present no threat to the PAO
dominance.
Brian Balmer, Frost & Sullivan Industry Analyst adds: "LAOs, the sole raw
material for PAO production have applications across a wide range of
markets. Fifty percent of global demand is for C4-C8 monomers whereas LAOs
in the range C6-C20 are preferred for synthetic PAO lubricants. So you can
see that availability of the most suitable LAOs is a key issue in the
manufacture of PAO synthetic lubricants."
The current European market for PAOs used in synthetic lubricants is
180,000 tonnes and valued at $255 million, the report forecasts that
revenues will rise to over $480 million by 2007. If this growth rate is
sustained then PAOs will overtake Group III oils as the largest
volume-selling synthetic base oil in Europe by the end of the forecast
period.
The report examines the market for synthetic lubricants from two angles: by
base oil chemistry and by end use. The chemistries covered are; group III
oils, poly-alpha olefins (PAO), polyisobutene (PIB), organic esters,
phosphate esters and polyalkylene glycols (PAG). The end use markets
covered by the report include 4-stroke crankcase oils, 2 stroke engine
oils, gear oils and ATFs, compressor and pump oils, hydraulic fluids and
metalworking fluids.
Background
Frost & Sullivan is an international marketing consulting company that
monitors a comprehensive spectrum of chemicals markets for trends, market
measurements and strategies. This ongoing research is utilised to
complement a series of research publications to support industry
participants with customised consulting needs.
Sales Contact
The European Synthetic Lubricants Market (report code 3873-39) published
August 2001 is available to purchase from: Frost & Sullivan, 4100
Chancellor Court, Oxford Business Park, Oxford, OX4 2GX, UK. Sales
Contact: Bill Stringer +44 (0) 1865 398651, bill.stringer@fs-europe.com