With a projected CAGR exceeding 23% over the next five years, the future of the U.S. re-refined basestocks market looks promising according to the recently published Used Oils and Re-refined Lubricants: U.S. Market Analysis and Opportunities report by global consulting and research firm Kline & Company. Given that all announcements pertaining to expansions and new capacities go as planned, it is anticipated that the re-refining industry will see a robust growth to an estimated 1,390 KT by 2016, suggesting a “golden decade” for many in the industry. However, this is contingent upon the successful and timely ramp-up of operational facilities.
Key drivers fueling this growth include enhanced technology and infrastructure, legislative imperatives, and rising crude oil prices. The improving quality and viability of re-refined baseoils coupled with increased and more consistent collection rates due to stronger regulations enforcement are helping the industry assert its largely untapped potential.
Kline’s expert, Tushar Raval, notes that, “The fact that giants of the re-refining market in Western Europe are heavily investing here concretely confirms that the U.S. market offers genuine and vast scope for growth in the re-refining space.”
Despite the encouraging potential, Kline’s Used Oils and Re-refined Lubricants: U.S. Market Analysis and Opportunities also identifies impediments concerning the otherwise strong re-refining business. These primarily include access to used oil and consumer acceptance of re-refined lubricants. To better ensure used oil access and supply, re-refiners are forming alliances or acquiring collectors and subsequently also reinforcing the general consolidation trend within the industry.
Raval elaborates, “The U.S. re-refining industry is growing rapidly, abetted by the improving quality of re-refined baseoils, better collection infrastructure mandated by stronger regulation and enforcement, the successful penetration of Group II and Group III basestocks, and an ever greater economic viability for both the producer and consumer.”
Used Oils and Re-refined Lubricants: U.S. Market Analysis and Opportunities consists of an in-depth analysis of this promising market segment whose potential is now being widely recognized and realized. Please contact us for additional information.
