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June 21, 2016

Volume 7 Issue 8

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Industrial Greases Flatline in Asia

HOT SPRINGS, Va.—A slowdown in China’s primary metals industry will squash demand for industrial greases in Asia-Pacific through 2019, Annie Jarquin of Kline & Co. reported at the National Lubricating Grease Institute Annual Meeting here last week.

According to Kline, the global grease market in 2014 was 1.3 million tons. The industrial segment accounted for 52 percent, or 677,000 tons, of which the Asia-Pacific region consumed 47 percent.

Over the next five years, the compound annual growth rate for industrial grease demand will be a measly 0.3 percent, according to Kline’s prediction, bringing global consumption to 691,000 tons in 2019. Geographic distribution is expected to change very little, and demand in Asia-Pacific will remain flat or possibly decline slightly from current levels, Jarquin said.

Asia-Pacific consumed 321,000 tons of industrial lubricating greases in 2014. Half of that regional demand was in China, followed by Japan, India, South Korea, Indonesia, Thailand and Taiwan. The top five country markets account for 90 percent of regional demand.

Primary metals dominate industrial grease demand in Asia-Pacific at 35 percent, above other industries (19 percent), mining (13 percent), off-highway (9 percent), general manufacturing (7 percent), transportation equipment (6 percent), power generation (4 percent), cement (4 percent), oil and gas (1 percent), food and beverage (1 percent) and pharmaceuticals (1 percent).

In China, the primary metals and off-highway transportation industries consume the most grease. Transportation equipment manufacturing and general manufacturing, especially fabricated metal products, top the list in Japan. India’s key industries are primary metals, transportation equipment manufacturing, off-highway transportation, cement and general manufacturing, and the country is seeing a trend toward high-performance synthetics in select applications.

Mineral oil-based greases are preferred in the region, to the tune of 93 percent. Growing production of API Group II and Group III base oils is leading to better-performing greases being used there, Jarquin noted.

Synthetics and semi-synthetics make up 6 percent of the regional market. Biobased oils account for only 1 percent and are used predominantly in Japan and Australia. Synthetic greases in the region are used primarily in severe applications such as steel mills, wind turbines and food processing.

The share of thickener types consumed has stayed constant for the past few years. “Increasing lithium prices are encouraging a change to alternative thickeners,” Jarquin pointed out. Despite this, lithium remains Asia-Pacific’s most popular thickener. Seventy-seven percent of the grease consumed by the region is made with lithium thickeners. Calcium was the second most-popular type of thickener, contained in 9 percent of the greases consumed there, followed by polyurea at 7 percent. Polyurea has made inroads in the steel industry, which is located mainly along the coast in China. Other choices accounted for less than 2 percent each.

The Kline & Co. report Jarquin cited is titled “General Industrial Oils and Grease: Global Market Analysis and Opportunities.”