There are a total of 40 grease plants in China today, Wang told Lube Report. Sinopec is the country’slargest grease manufacturer, with outputover 30,000 tons per year.

Other majorgrease suppliers are Gaorunjie Chemical Co. in Wuxi, with output of about 7,700 tons per year; Shanghai Hailing Grease (about 5,000 tons per year); Zhongcheng Petrochemical in Changsha (4,100 tons per year); and Chengdu Shuguang Petrochemical (2,000 tons per year).

The countrys grease production has climbed dramatically since 2000, whenoutput totaled less than 70,000 tons. Production topped 103,000 tons in 2003, reached 120,500 tons in 2004, and data for 2005 will show continued growth, Wang predicted.

Looking at high-performance greases, including lithium complex, aluminum complex, polyurea and organo-clay, Wang noted that these currently account for less than 12 percent of total production in China, compared to 47 percent in North America and 25 percent in Japan.

In its move to higher quality greases, China has shifted from calcium soap greases to lithium soap greases. In the early 1980s, Chinas grease market was nearly two-thirds calcium and just 8 percent lithium. In 1994, production of lithium soap greases surpassed calcium soap for the first time, and by 2004 lithium soap greases accounted for 79 percent of the market, calcium soaps for only 13 percent.

The production scale for most Chinese grease factories is relatively small, Wang continued, lower than in North America, Europe and Japan. There are only three grease plants with annual production over 5,000 tons per year. The average production of the top 25 grease plants in China is 2,555 tons per year, she said. This compares to 7,765 tons per year in Japan, 5,841 tons per year in North America, and 4,318 in Europe.

Citing data from the China Lubricating Grease Institute, Wang said Chinas total grease production capacity in 2004 was 211,000 tons per year, while actual production totaled 120,500 tons, a utilization rate of just 57 percent.

Rapid economic growth, particularly in the steel and vehicle industries, will demand increasing quantities and qualities of greases, said Wang, a great opportunity for further development of Chinas grease industry. While the quality of greases needs improvement, the demand for high dropping point and high performance greases will increase in the near future.

She also noted that research is under way on environmentally friendly greases, and on standards and methods of analysis for biodegradable greases. New additives for higher grease quality and lower consumption are also under study.

In conclusion, Wang noted that CNOOC looks forward to supplying naphthenic base oils for production of high quality greases. CNOOC announced last year that it will build a new naphthenic refinery with capacity of 400,000 metric tons per year. The location has not yet been announced, but it will be along Chinas coast, perhaps near Bohai Bay, the source of the new plants naphthenic crude. Earlier this month, CNOOC projected that the new refinery would begin production in 2008, and that a majority of its output will be exported from China.