This study analyzes the US specialty fuel additives industry. It presents historical demand data for the years 2001, 2006 and 2011, and forecasts for 2016 and 2021 by additive type (e.g., deposit controls, cetane improvers, petroleum dyes and markers, antioxidants, lubricity improvers, corrosion inhibitors, cold flow improvers, metal deactivators), application (e.g., gasoline, diesel fuel) and market. The study also considers market environment factors, evaluates company market share and profiles US industry players.
The US specialty fuel additive market will rise at a healthy pace, reaching $1.6 billion by 2016. Advances will be driven by a rebound in petroleum fuel demand as the economic recovery continues to strengthen, and an increase in additive rates due to greater biofuel consumption as mandated by the federal government. Additionally, market growth will reflect further price inflation, though at a slower pace than during the 2006- 2011 period.
Going forward, government regulations will play a significant role in the demand for specialty fuel additives. The EPA will raise the amount of biodiesel and ethanol usage in the fuel supply in an effort to meet the requirements of the Renewable Fuel Standard 2 (RFS2). These biofuels require the usage of different specialty fuel additives. For example, the EPA’s move to allow up to 15 percent ethanol blends in gasoline will stimulate corrosion inhibitor demand.
Deposit control agents to remain largest segment
Some of the biggest impacts of the RFS2 regulations will be in the diesel additive segment. Cold flow improvers will grow at the fastest rate relative to other fuel additives due to the rising use of biodiesel. Biodiesel’s reduced functionality in diesel engines in winter conditions requires higher loadings of cold flow improvers. However, biodiesel’s high cetane number and excellent lubricity will also contribute to a reduction in the demand for lubricity improvers and cetane improvers. Overall, diesel additive volume demand will rise through 2021 due to increasing diesel fuel demand as the expanding economy leads to more goods shipping and more fuel-efficient passenger diesel cars entering the market.
Increased biofuel consumption will also impact gasoline additives. Corrosion inhibitors will grow at a pace slightly above average, reflecting ethanol’s increasing usage in the gasoline supply. Deposit control agents will remain the largest product segment, though annual increases will be modest. A previous attempt by the EPA to regulate detergent levels in gasoline actually resulted in a fall in demand, causing deposit-related engine problems. This prompted several automakers to establish the Top Tier Detergent Gasoline standard in 2004. Deposit control demand rebounded quickly as most major gasoline brands adopted the Top Tier standard. Through 2016, the modest growth in this segment will be driven by recent retailer efforts to differentiate their products to customers by promoting the high concentrations of detergents in their gasoline.
Blender & terminal additive demand to continue growth
From a market perspective, blender and terminal additive demand will continue to grow at the expense of the refinery market as the industry continues to shift toward more independent and customized refinery operations. The efforts of smaller fuel retailers to boost detergent levels as part of their marketing strategy will also favor growing demand in the blender and terminal market, as will greater biodiesel consumption. This latter trend will also lead to more cold flow improver being added at the blender and terminal level. Though much smaller than the blender and terminal market, aftermarket demand will grow at the fastest pace as customers try to offset higher fuel costs by maintaining the internal cleanliness of their engines. Rising aftermarket demand will also reflect a decision by some retailers to let consumers buy additives at the pump.
Profiles competitors such as Baker Hughes, BASF, Chevron Texaco, Infineum, Innospec, Lubrizol, Nalco and New Market and more.