Citing Fredonia Group statistics, he told the Global Business Clubs Russia and CIS Base oils and Lubricants conference, in Moscow in May, The global finished lubricants market stood at 39.2 million tons in 2015, and demand for lubricants is forecast to rise 2.3 percent yearly to 44 million tons by 2017. He added that grease comprises 5 percent of that volume. Based in Amsterdam, Netherlands, ELGI is Europes leading industry association active in the field of lubricating greases.

Grease Market Outlook

According to United States-based National Lubricating Grease Institutes survey of global grease production in 2015, China is the top grease producer, with 86 grease plants that generated 401,000 tons of product in 2015. By regions, China held the greatest market share, comprising 37 percent of the market in 2014. In 2014, Chinas production even slightly exceeded Europe and North American grease outputs combined, Dicken said.

However, in 2015, combined European and North American grease production exceeded Chinese production. Both continents produced 924,000 tons of greases, according to the NLGI report.

North American production follows Chinas, with 55 grease plants reporting an output of 219,000 tons of lubricating greases. The survey revealed that 58 European grease plants produced 201,000 tons in 2015. European total production declined by 3.5 percent in 2014, but increased 0.6 percent on a comparative basis, Dicken noted.

With only 17 plants, Japan produced 81,000 tons of grease in 2015. India and the Subcontinent operated 22 plants, reporting 75,000 tons of product. Asia-Pacific and Southeast Asia operated 14 plants and produced 68,000 tons of grease. Dicken noted that between 2010 and 2014, Japan and Southeast Asia were the only regions that showed any measurable growth in grease production, while China and India reported significant declines of 6 percent and 12 percent, respectively.

Africa, the Middle East, the Caribbean and Central and South America operated 25 grease plants. These countries produced a total of 82,000 tons in 2015.

Thickeners

Thickeners are the main component of a grease; some compared them to sponges infused with oil. When you squeeze it, the oil comes out and lubricates the surfaces, Dicken said.

Today, lithium and lithium complex thickeners are used in more than three-quarters of the total global grease production. Around 56 percent is based on lithium thickeners, and another 20 percent is based on lithium hydroxide complex thickeners, Dicken said.

In Europe, simple lithium grease production fell for a second straight year. In 2014, output was down by 7 percent compared to the year before. On the other hand, lithium complex grease production increased by 3 percent for the second consecutive year.

On a global level, NLGI observed the same slight but continuing trend to lithium complex greases at the expense of simple lithium greases. Calcium anhydrous and calcium hydrate, the second most used thickeners after lithium, shrank by 2 percent to 78,000 tons worldwide in 2014.

Aluminum complex grease is another thickener type that continued to decline in Europe. Production of this type of thickener fell 4 percent from 2013 to 2014. Production has declined an average of over 2 percent annually during the four-year period 2010 to 2014, Dicken reported.

Polyurea and calcium sulfonate are some of the less widely used thickeners, he said, but they are experiencing growth. Polyurea greases continued slow growth to over 5 percent of total global production from 2010 to 2014. In Europe, in the last five years, polyurea greases have shown continued growth of up to 20 percent from 7,000 tons to around 10,000 tons in 2014.

The use of polyurea thickeners in Japan also increased nearly 7 percent to 22,000 tons in 2014. Polyurea popularity in Japan is a historical trend, and I guess it came out of the car production in the 1960s, possibly due to U.S. influence, Dicken related.

On the other hand, North America has been fairly consistent over the last four years, while Chinas polyurea greases inexplicably surged to 24,000 tons in 2013, then slumped to 16,000 tons a year later, Dicken observed. World calcium sulfonate greases grew 12 percent to 29,000 tons in 2014.

Base Oils

Mineral base oils represent over 92 percent of global grease production, according to the NLGI survey. Other type of base oils used in grease production include esters, polyalphaolefins and synthetics.

Production by all base oil types has remained fairly consistent over the past three years, Dicken said. Synthetic base oils comprise just 4.4 percent of the total grease production, and semisynthetics account for 2.6 percent. Biobased oils represent just 0.6 percent of the total reported global grease production.

In contrast to the rest of the world, Europes percentage of biobased grease production comprises 2.2 percent of the total European grease output, according to NLGI. In Europe, conventional base oils represent less than 90 percent of the continents grease production, Dicken said.

Hurdles with REACh

The European Unions REACh (Registration, Evaluation, Authorization of Chemicals) legislation requires the registration of metallic grease thickeners if they are produced or sold in the EU, Dicken said. The major implication is that the thickeners need to be registered. The registration deadline for small-volume producers that manufacture up to 100 tons annually is in 2018.

Registration deadlines already expired in 2010 and 2013 for mid- or large-scale metallic thickener producers (100 to 1,000 tons, and above 1,000 tons of annual production), ELGI said. Those producers that have less than 1 ton of metallic thickener production annually are exempt from REACh. To help control costs, ELGI recommends that producers file their registration through the European REACh Grease Thickeners consortium.

The annual cost to renew registrations for such thickeners as lithium, calcium and aluminum can vary from 40,000 to 100,000. These expenses could have serious implications for the European grease industry. For example, Dicken predicted that grease research and development and production may move out of Europe, and some raw materials and finished grease products could be withdrawn from the market.

The consultant expects lithium grease thickeners to continue their domination of the market, but manufactures may move to other soaps. Automakers from the United States and China have shown a heavy appetite for lithium for use in electric car batteries. This demand has created a global supply squeeze, and the ready availability of lithium has dropped significantly in 2016.

The price of lithium has gone up five times in the last six months, and some grease makers are ready to increase their finished product prices because their contract prices went up, Dicken said. He is confident that regional variations will continue to be more popular and that, in light of short lithium supplies and high prices, a move to alternative thickeners will happen and in some cases is already happening.

Calcium grease could undergo a renaissance, Dicken added. He also speculated that polyurea thickeners could gain momentum in Japan, China and North America. ELGI also expects that specialty grease thickeners will continue to grow, and new research will create innovative products. He concluded by predicting that the grease market will continue to grow, driven by rising industrial output, and that emerging markets will to show the largest demand.