Several developments in U.S. heavy industry and environmental policy this week point to evolving conditions that may influence lubricant demand in 2026. One of the most significant updates comes from U.S. Steel—now owned by Nippon Steel—which will restart the idled “B” blast furnace at its Granite City Works facility in Illinois.

The restart, expected in the first half of 2026 and projected to add approximately 400 jobs, is part of Nippon Steel’s broader $14 billion investment commitment to its U.S. operations. Rising demand in the automotive, construction, and infrastructure sectors is contributing to the move. A restart of this scale typically increases consumption of industrial lubricants—hydraulic oils, gear lubes, metalworking fluids, and greases—given the heavy mechanical loads and continuous operations in steelmaking.

Regulatory changes may amplify this impact. On November 24, 2025, the Environmental Protection Agency filed a motion with the U.S. Court of Appeals for the D.C. Circuit to vacate the 2024 particulate-emissions “Soot Rule” and revert the national PM2.5 standard from 9 µg/m³ back to the 2012 level of 12 µg/m³. If approved before the February 7, 2026 deadline, the shift could ease compliance costs for facilities in heavy manufacturing, energy production, and metals processing. Historically, periods of reduced regulatory pressure have supported longer production cycles and fewer mandated curtailments—conditions that can increase lubricant consumption across critical equipment.

Broader industrial indicators, however, remain mixed. According to recent Federal Reserve data, U.S. manufacturing output was unchanged in September 2025, following a modest 0.1% increase in August, underscoring uneven recovery across sectors. Meanwhile, the ISM Manufacturing Index fell to 48.2 in November, from 48.7 in October, signaling continued contraction. Industry forecasts from the World Steel Association and AIST anticipate U.S. steel output rising 1–3% in 2026, supported by infrastructure spending and tariff-related demand. Under optimistic scenarios tied to trade protection, growth could reach 5–7%, though this is not the base-case outlook. Based on historical patterns linked to furnace restarts and incremental industrial expansion, these shifts could translate into 2–4% increases in industrial lubricant volumes across heavy manufacturing.

For lubricant distributors and manufacturers, the picture heading into 2026 is one of cautious opportunity. Renewed investment in steel production capacity, paired with potential regulatory easing, may create favorable conditions for industrial and heavy-duty lubricants even as parts of the manufacturing sector continue to operate below full momentum. Closely monitoring steel utilization rates, regulatory outcomes, and downstream industrial activity will be essential as market conditions evolve.

Sources

• U.S. Steel / Nippon Steel public statements and industry reporting on the Granite City Works restart
• EPA filing to the U.S. Court of Appeals for the D.C. Circuit regarding the 2024 PM2.5 standard
• Federal Reserve Industrial Production and Capacity Utilization report (September 2025 data)
• ISM Manufacturing Report (November 2025)
• World Steel Association Short-Range Outlook
• Association for Iron & Steel Technology (AIST) commentary and projections