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ANALYSIS


What are the Current and Future Factors Affecting Growth of the MWFs Market?


Sushmita Dutta, Project Manager, Kline


The market of metalworking fluids is among the stronger avenues of the lubricants industry. While the market remained almost flat in 2019 with a small growth of 0.2% compared to the previous year, the situation is different from one country to another. For example, Asia-Pacific, the largest market for metalworking fluids with a share of nearly 40% in global demand, remained almost flat, but this is mostly due to a decline in China’s consumption.


While the market of Europe has shrunk, North and South America reported a moderate growth of 1%-2% in 2019. However, it is not only regional performance that impacts the overall growth of the global metalworking fluids market but also technological and product trends. Thus, let us look closely at what has been shaping the industry.


Regional Differences


In 2019, the United States was the leading consuming country with 23% of global metalworking fluid (MWF) demand, followed by China and Japan.


Other large consuming nations include Russia (the largest consumer in Europe), Germany, South Korea, and India.


The U.S. metalworking fluids market is mature, posting growth in the range of 1% to 2% over the last two years. The year 2018 was recognised among market participants in the country as positive in


32 LUBE MAGAZINE NO.156 APRIL 2020


terms of metalworking fluids sales across all end-use industries, except the automotive industry. Within the automotive industry, the developing electric vehicle (EV) market is going to substantially reduce the need of internal combustion engines, since EVs have electric motors instead, which require fewer steps of production and less metalworking fluid consumption.


The decline in China was primarily caused by sluggish end-use market performance, particularly automotive manufacturing; following an already steep drop in 2018, it suffered a double-digit decline in 2019. In Contrast, the Japanese market experienced 5% growth year-on-year between 2013 and 2018; however, due to friction between China and the United States, the demand growth in Japan for metalworking fluid had slowed down in 2019.


In Europe, all country markets saw a reduction in consumption in 2019, with a few exceptions like Russia and Poland.


In Russia, metalworking fluid is the second-largest category within the industrial lubricant segment.


The segment has been stable without large variations over the years. And owing to the steady annual growth of automotive production in the country and increasing exports of steel and primary metals over the past few years, it is expected that demand for metalworking fluids will keep increasing in line with growth in the manufacturing sector.


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