Asia Leads in Industrial Grease Demand


Led by strong growth in Asia, global industrial grease consumption is projected to grow about 2.6 percent per year, from 695,000 metric tons in 2011, to 790,000 metric tons in 2016, according to Kline & Co.

Asia is the fastest growing industrial grease market, with 4 percent annual growth from 2011 to 2016, said Milind Phadke, India-based director for Klines Energy Practice, during a webinar April 17. The grease market growth was driven by industrialization, including growth in mining and manufacturing that boosts grease consumption.

Industrial grease consumption in Europe is expected to grow at just under 2 percent per year, from 2011 to 2016. Europes growth, he said, is driven by the recovery that is expected to happen over the next five years. Current levels are quite low compared to historic levels, so we feel there is a lot of room for this lost volume to improve, which would represent some growth.

Kline foresees little growth in industrial grease consumption in North America, where the growth rate is expected to be less than 1 percent from 2011 to 2016.

Phadke said Kline projects some growth in industrial grease consumption in South America and North Africa, due to increased industrialization and industrial grease capacity additions. We see a lot of scope for growth and consumption, he said. However, this is from a small base.

Kline estimated total overall global grease consumption for all segments at nearly 1.3 million tons in 2011. About 40 percent of that consisted of various automotive applications. The webinar focused on the 55 percent, or 695,000 tons, of which Asia consumed 48 percent, Europe 22 percent and North America 18 percent.

China, the United States, Russia, Germany and Japan are the top five country markets, together accounting for more than 57 percent of global industrial grease consumption. This is no big surprise because each of these countries is highly industrialized, he said, noting they have large manufacturing bases in terms of metalworking industries, general manufacturing, automotive manufacturing, machinery manufacturing, mining construction, power generation and other such sectors. Other key markets include India and South Korea in Asia; Spain, Turkey and France in Europe; and Canada and Mexico in North America.

For industrial applications, soap-based greases dominate, meeting about 91 percent of total demand. Of this, lithium and lithium complex soaps account for close to three-fourths of the total demand, and calcium soaps account for another 10 percent, Phadke said.

Greases formulated with mineral base stocks account for close to 90 percent of the global industrial grease demand by volume, while synthetic greases amount to about 9 percent of demand and biodegradable greases 1 percent.

Kline believes opportunities lie in both multipurpose customized greases market. Multipurpose greases will continue to be the mainstream product, he said. It is cost effective, has good water resistance, good load capability, and a wider temperature range. This will continue to be an attractive product and will be a product that could be in demand.

At the same, he said, there is a growing demand for customized industrial grease products which address specific customer issues in a cost effective manner. The big challenge is getting customized products approved because this can be big barrier, Phadke noted. Synthetic, food grade, and biodegradable products are all likely to be niche products which will be sold in key end use industries on specific performance guarantees.

One important dynamic is the choice between greases and lubricating oils. We see some applications – for example open gears are moving more and more towards greases, and that would help increase consumption of greases, he pointed out. On the other hand, we do have some consumption moving away from greases to heavy gear oils, especially in railroad segments.

Key growth industries for grease consumption include primary metals, mining and power.

In terms of challenges, grease marketers see consolidation of grease manufacturing as a major concern and challenge to their business. As the number of manufacturers is reduced, there is greater and greater dependence by grease marketers on fewer companies, Phadke said. There is less choice for sourcing greases.

Another big challenge is end user education. What we see is that with the proliferation of grease products based on different technologies, base stocks and marketing claims, the end user is at a loss to make a choice as to which product best suits their requirements, he said. This also makes it difficult for the marketer to guide the user to high performance greases, especially when there are a number of low cost options around.

Other challenges include approvals and introduction of new higher performance greases due to the risk-averse nature of the industry and cost of qualification, and rising raw material costs that are difficult to pass on to end-users.

Klines report is titled Global Industrial Oils and Fluids: Grease Market Opportunities and Threats.

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