US demand for synthetic lubes and functional fluids expected to increase 6% pa.
The Freedonia report forecasts demand to reach $6.2bn by 2018 with engine oils, in particular Group III base oil, accounting for the largest share of growth. The market volume is expected to rise to 550 million gallons.
Demand for product performance and environmental concerns are the key drivers, according to Freedonia,with synthetic products often specified by government regulations, manufacturer and industry groups. The benefits of synthetics may also lead end-users to specifically request them.
Lower viscosity motor oils are increasingly being called for in new vehicle lubricant specifications, requiring a specific need for synthetics - for example GM DEXOS1, or the requirement for SAE 0W-20 motor oils in most new Honda and Toyota vehicles.
The heavy duty and off-highway market is also set to see wider use of synthetics, which offer extended maintenance intervals and improved fuel efficiency.
Gas-to-liquids (GTL) base oils - currently considered a premium synthetic product - are expected to expand in the US, along with synthetics in energy and power generation, automotive equipment, and industrial machinery markets, according to the research.