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Engineering Industry Reports and Surveys
News Release from: Frost and Sullivan
Edited by the Engineeringtalk Editorial
Team on 31 August 2001
Increased demand for Linear-Alpha
Olefins
A new study from international market analysts Frost and Sullivan reveals that the growth in the synthetic lubricants industry in Europe is driving an increased demand for Linear-Alpha Olefins
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 (3 in N.America, 2 in the Middle East and a new 20,000 tonnes/yr plant in the Far East recently announced by Idemitsu) is testimony to this expansion
This article was originally published on Engineeringtalk on 9 Aug 2000 at 8.00am (UK)
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A new study from international market analysts Frost and Sullivan reveals that the growth in the synthetic lubricants industry in Europe is driving some of this increased demand for LAOs.
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%.
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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 and 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.
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