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Published: December 2012
Synthetic lubricants (synlubes)—formulated products consisting of synthetic base stocks plus additives—have physical and chemical properties that are generally superior to those of conventional mineral oil–based lubricants. As a result, synlubes are the lubricants of choice in applications with especially demanding performance requirements.Since synlube base stocks 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 the 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 has been the promotional campaigns of lubricant manufacturers for their synthetic automotive crankcase and gear oils and the new requirements of automobile manufacturers, especially in Western Europe. The ongoing demand for higher fuel economy also pushes the use of high-quality motor and gear oils. Another important development was the growing use of synlubes as refrigerator oils to provide compatibility with the new refrigerants that have replaced chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).The market for synthetic lubricant base stocks is dominated by three product groups—polyalphaolefins (PAO), esters, and polyalkylene glycols (PAG). Their combined market share in 2011 was almost 90%. PAO accounted for 45% of the total synlube base stock in 2011, followed by esters at 29% and PAG at 13%.The following pie chart shows world consumption of synthetic lubricant base stocks on a volume basis:From 2006 to the first half of 2008, PAO demand and raw material supply were balanced and at a high production level. With the onset of the economic crisis in the second half of 2008, sales decreased sharply. As the economy recovered, PAO consumption increased at 4% per year during 2009–2011. PAO consumption is increasing in new applications, such as wind power generation plants, where it is used for gear oil. An increase in wind power generation plants is stimulating PAO consumption.Esters have a much broader application range than all other synlube base stocks. During 2008–2011, growth was seen in refrigeration, where growing production of compressors for refrigeration and air-conditioning in China and Brazil drove demand; aviation turbines (deliveries of new passenger aircraft greatly increased from 2004 to 2008 and will probably continue to do so); and increasing automotive production in developing countries, which will increase use for gear oils and indirectly for use as rolling oil in steel production, and as industrial hydraulic or metalworking fluids. It is expected that growing demand in Brazil, Russia, India and China will lead to growing production in these countries in the next five years.The synlube application has only a minor share of total PAG production—between 5% and 10%, depending on the region. PAG consumption profited from the growing economies in Asia, Eastern Europe and South America. PAG is used in fire-resistant hydraulic fluids used in mining and metal processing; compressor lubricants for industrial uses such as in chemical and petrochemical complexes; and as a lube oil for automobile air conditioners.The synlubes business includes large volumes of polyalkylene glycols and low-viscosity polyalphaolefins that are sold largely as commodities, but also many small-volume, high-priced specialty chemical products. Nearly all synlube base stocks enjoy growth rates that are higher than those of 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 would not be 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 lubricant base stocks in the global lubricant base oil business is only around 3%, their importance is growing as more and more applications demand a level of performance that is borderline or 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 world market for synlube base stocks is projected to grow at an average annual rate of around 3.5% per year on a volume basis to 2016. Growth in synlube base stocks is expected to continue at a low rate in Europe and Japan. In contrast, high growth rates are expected in developing countries including China, Other Asia and South America.