Flat global lubricant market could become volatile in 2012: Kline

Despite the global lubricants market's 6 per cent rebound in 2010 and a promising start to 2011, the industry's growth has generally abated according to international consulting and research firm Kline & Company.

Asia, until now the major engine for growth, has seen its new car sales growth contract, with China's growth estimate for 2011 at 3 per cent compared to 30 per cent last year, while India is estimated to see just 2 per cent growth compared to the double-digit magnitude enjoyed last year.

On the other hand, 2011 Q1-Q3 car sales in the United States are up 10 per cent over the same period last year and steel production remains resilient in the face of near universal declines: Asia is declining 0.7 per cent per month (mainly due to China; India continues to grow), the EU  is declining at 7.7 per cent per month while Germany, France, and Italy are declining at 4 per cent, 11 per cent, and 19 per cent per month, respectively.

Fueled by large domestic economies, Russia and Brazil are maintaining growth with car sales in Brazil alone up 7.5 per cent over last year. Brazil's strong currency is also helping by driving consumer spending. However, global financial uncertainly is affecting both countries' exports and consequently growth is slowing.

With no solution yet found for the paralyzing eurozone financial crisis, exacerbating an already precarious and wary global economy, Kline's research indicates modest—if any—growth in car sales in the near-future, which will challenge the lubricant industry's recovery from the lows of 2008-2009.

Essentially, despite an encouraging start Kline & Company extrapolates a flat global lubricants market in 2011, and with these particularly uncertain times, a volatile 2012.

More on the lubricants market can also be found in Kline's annual report Global Lubricants Market Analysis and Assessment which provides a detailed analysis of the global automotive and industrial lubricant industry segments.