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