Brighter Future for Russian Greases

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MOSCOW – Russias grease production is expected to grow at an annual rate of 5 to 7 percent after 2014, when new plants will be launched, a research study found. By 2020, domestic grease production will meet 80 percent of the nations demand, up from less than 60 percent today.

Russias grease production is recovering from the 2008-2009 global recession. In 2011 it totaled 42,000 metric tons, valued at 1.6 billion rubles (U.S. $54.6 million), Olga Voloshina of InfoMine, a Moscow based consultancy, told the WRA Base Oils and Lubricants in Russia and the CIS conference held here last week.

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From 1999 through 2011, grease prices in Russia quadrupled from 10,000 to more than 40,000 rubles per ton by the end of 2011, according to InfoMine.

Domestic producers cannot meet Russias demand for higher quality greases, so end-users rely on imported products. InfoMine found that grease imports into Russia accounted for up to 45 percent of total consumption in 2010 and 2011.

The bulk of greases imported into Russia come from Ukraine-based grease producer Agrinol, according to InfoMine. Other countries supplying grease to Russia include Finland, Germany, Netherlands and the United States. Since 2009 the share of high grade greases imported from Netherlands, Sweden, Japan, Canada and other countries to Russia increased, Voloshina said.

In 2011 Agrinol held the biggest share of grease imports to Russia, or around 18 percent. Shell held second place at 17 percent, followed by Mobil and Total, at 10 percent and 4 percent respectively. The other imported grease came from a variety of suppliers.

Somewhere between 7 and 17 percent of Russias grease production is exported, primarily to Kazakhstan, followed by Mongolia, Kyrgyzstan and Ukraine.

During the past decade, thickener types have begun to change in Russia. Production of complex and mixed soap-based greases, as well as organic and inorganic thickener-based greases, increased in 2011, compared to 2000, Voloshina said, adding that Russian grease quality remains far behind Western Europe and United States, where the main grease products are lithium-based.

A decade ago, the share of lithium greases in the total grease processing in Russia was only 20 percent, whereas in the West it was 60 percent, Voloshina said. Meanwhile the share of low-quality calcium hydrate based greases in 2000 amounted to 40 percent, while the production of sodium and sodium-calcium based greases amounted to 31 percent.

Lithium-based greases in Russia in 2011 held around a 40 percent share of the total greases production. While the share of low-quality calcium based greases in 2011 is still high, and it amounted to around 35 percent, Voloshina said.

More than 70 companies manufacture greases in Russia, she continued. The largest, and their share of Russias grease production, are:
-Gazpromneft SM, 16%
-Kuzaks, 13%
-RNMZ Rikos, 12%
-Perm Grease & Lubricant Plant, 8%
-Neftemaslozavod, 7%
-PKF Rusma, 7%
-All others, 37%

Grease consumption in Russia in 2011 amounted to 52,000 tons, 25 percent higher than in 2010, Voloshina said. Russias biggest grease consumer is the railway transport sector, which held a 27 share of total grease consumption in 2011. It is followed by the oil and gas sector (21 percent), metallurgy (19 percent) and automotive transport servicing (10 percent).

The consultancy doesnt expect a significant increase in grease consumption in Russia in the next two to three years, compared to 2011. In part this reflects the move to higher quality greases.

However, InfoMine predicts that grease demand in 2015 could reach 75,000 tons. In the medium term, the share of hydrated greases will continue to decrease, and the share of more advanced products will increase. By 2020 the share of lithium greases in Russia could exceed 50 percent.

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