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Synthetic lubricants (synlubes) are defined as lubricant products that consist
of fluids made by chemical conversion of low-molecular-weight components plus
additives. Products derived by hydrogenation/cracking after distillation of
crude oil are not within the scope of this report. Mineral oil–derived
products are marketed as “synthetic” by the industry.
Since synlubes are generally far more expensive than conventional mineral
oils, their use has traditionally been restricted to those applications that
demand the very high performance characteristics that only synlubes can provide.
Increasingly, however, industrial customers in some segments are taking a broader
and longer view of their total costs and are opting to use synlubes to reduce
maintenance, minimize disposal problems, or satisfy health, safety or environmental
regulations. Since the 1990s, a major driving force for the strong growth of
synlubes in the automotive sector is the promotional campaigns of lubricant
manufacturers for their synthetic automotive crankcase and gear oils and the
new requirements of automotive manufacturers, especially in Western Europe.
Another important development was the growing use of synlubes as refrigerator
oils to provide compatibility with the new refrigerants that have replaced
chlorofluorocarbons (CFCs). The latter development has continued into the new
century, and greatly increased the use of synlubes in this application.
The following pie chart shows world consumption of synthetic lubricants on
a value basis:
The synlube business includes large volumes of polyalkylene glycols and low-viscosity
polyalphaolefinsthatare sold largely as commodities,
but also many small-volume, high-priced specialty chemical products. Nearly
all synlubes enjoy growth rates that are faster than mineral oils, and many
are growing faster than other specialty chemical product types. Although many
segments of this business appear attractive (good growth and limited competition),
entry into this market is not easy, except through acquisition, which often
means acquiring other related businesses linked to synlubes only by the family
of products the acquired company produces.
While the total share of synthetic lubricants in the global lubricant business
is only around 2.4%, their importance is growing as more and more applications
demand performance that is beyond the capabilities of conventional lubricants.
This is reflected by the fact that synlubes represent about 10% of the total
value of the global lube oil market. The 2005 market for synlube base stocks
in North America, Western Europe and Japan is estimated at about 727 thousand
metric tons, valued at nearly $2.3 billion. The world market is projected to
grow at an average annual rate of 2.6% per year on a volume basis, leading
to a volume of about 993 thousand metric tons in 2010. Growth in synlubes is
expected to continue at a low to moderate rate in North America and Europe.
In contrast, no growth is expected in Japan, except in the refrigerant market
segment. High growth rates are expected in China, Brazil and India.
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