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SECTOR FOCUS: METALWORKING FLUIDS


Metalworking fluids and industrial oils – finding value post-COVID


Annie Jarquin, Director, Energy, Management Consulting, Kline


The global COVID-19 pandemic has caused a period of unprecedented uncertainty for businesses, with guidelines and restrictions put in place by various governments affecting the way we operate both on an individual and business level. As the world begins to get back to normal, there are a number of ways in which we can try to forecast the next stages of these uncertain times, by setting businesses within the larger value chain in which they operate.


The metalworking fluids sector is a good example to use to understand how the market and value chain can be evaluated in a way that is beneficial to businesses. Even prior to the COVID-19 pandemic, with the onset of increasing environmental considerations, many businesses operating within the petrochemical industry were facing declining demand. With a volumetric outlook which is negative, possibly having reached “Peak Lube”, looking beyond products and volume to a service and value-in-use focused approach is essential.


Given the complexity of the times we’re in, looking beyond a business’s immediate customer base to its supplying partners and the entire value chain is required. This can be illustrated with the following examples: in the mining industry, businesses are serving both the cement and primary metals industries. The cement industry in turn serves the construction industry, while primary metals like steel, for example, are serving construction, metalworking and other manufacturing businesses.


14 LUBE MAGAZINE NO.163 JUNE 2021


Likewise, looking at oil and gas, we can see that this is serving the chemicals and materials industry, which goes on to serve general manufacturing and products including plastics.


Figure 1:


Metalworking fluid product by sector wheel


By focusing on the end sectors – construction, metalworking and general manufacturing – we can begin to examine what is driving those industries and what information is guiding the directions these industries are taking.


Of course, within an ever-changing industrial landscape, basing forecasts on real data is important, and such data comes in many forms: consumer confidence, demand and consumer behaviour,


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