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European Markets for Metalworking Fluids
Frost & Sullivan, Dec 2005
Stringent Health, Safety and Environmental (HSE) Regulations Necessitate Product Innovation
Since exposure to metalworking fluids presents the danger of developing a variety of skin- and breathing-related illnesses, the European metalworking fluids industry is having to comply with stringent HSE regulations. In addition to the HSE norms, there are restrictions on the presence of volatile organic compounds (VOCs) in products, prompting suppliers to work towards removing environmentally unacceptable constituents such as chlorine, boron and amines in their formulations. While the development and growth of biodegradable synthetic and vegetable oil-based fluids have helped address many of the HSE concerns, suppliers will need to further innovate to ensure that their products meet regulatory and customer requirements.
This Frost & Sullivan research service is a strategic analysis of the European markets for metalworking fluids. It examines the market for four different classes of metalworking fluids including neat oils, soluble oils, semi-synthetic fluids and synthetic fluids. Each market segment is individually analysed, detailing key market and pricing trends and providing unit and revenue forecasts through to 2012. This research service also analyses various pieces of legislation and their impact on the product mix in this market.
Growth in Niche Market Applications Increases Demand
On account of them being lighter in weight than ferrous materials, there has been continued growth in niche market applications such as titanium, nickel, copper, aluminium, magnesium, their alloys and other non-ferrous metals. This shift to materials that require high performance and higher priced metalworking fluids is expected to have a continuous positive effect on the total European metalworking fluids markets.
Further, with end users demanding products that comply with environmental regulations, the development and promotion of semi-synthetics and synthetics based on polyalkelene glycol (PAG) and polyol esters is a key driver for the European metalworking fluids markets. In the near future, fluid development and usage in different regions of Europe is likely to follow the German example and move in the direction of fully synthetic products, says Frost & Sullivan analyst. These are better able to answer the demand for enhanced performance, particularly in extreme conditions, and this driver is likely to remain strong in the next four to five years.
Eastern Europe Promises Opportunities for Suppliers of Metalworking Fluids
With global automotive manufacturers beginning to establish production plants in Eastern Europe, the region holds significant opportunities for metalworking fluid suppliers. EU member states such as Poland, Hungary, Czech Republic and Slovakia are beginning to show good economic development and as a result, the metalworking fluids industry in these parts is growing at 3 to 4 per cent per annum. While these growth rates are expected to continue for the next four to five years, the ongoing recovery in Western economies such as Germany, France and the United Kingdom will also have a beneficial influence on the European metalworking fluids markets.
The European market for metalworking fluids is mature and is being challenged by increased legislation and changing technological trends. In addition to this, increasing base oil, raw material, energy and freight costs are exerting added pressure on supplier margins, says Mr. Rao. Continuous product development centred around modifying existing products and developing new innovative products could be key for suppliers to gain a competitive advantage in the European markets for metalworking fluids.
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