Promising forecast for the U.S. re-refining industry, Kline reports

PARSIPPANY, NJ – 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 fuelling 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.

An emerging trend observed in the U.S. re-refining industry consists of an influx of foreign re-refiners who, having identified the expanding opportunities within North America, are consequently establishing plants in the country. These include leading re-refiners from Western Europe and India. 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. The acceptance of re-refined lubricants is likely to be an incremental phenomenon assisted by more brands — especially major oil brands — entering this market, a more ubiquitous availability, and a greater emphasis upon intrinsic value with little or no compromise.

Raval elaborates, “The used oil business has turned on its head in recent years. Whereas previously, generators paid to dispose of used oil, now it’s something to be sold. Essentially, used oil has been transformed from a liability to an in-demand commodity for generators, and consequently a revenue stream.” Raval continues, “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 or register today for a free Used Oils and Re-refined Lubricants Webinar scheduled for Tuesday March 5, 2013, 9:00 am U.S. EST. (March 4, 2013)