The European grease market is expected to registering a CAGR of over 1% during the forecast period. The major factor driving the growth of the market studied is the environmental and health concerns regarding brominated and other flame retardants.
- On the flipside, the non-suitability of hydroxides to high-temperature applications is expected to hinder the growth of the market studied.
- Increasing prominence for polyurea greases is projected to offer opportunities for the manufacturers in the near future.
Key Market Trends
Metal Soaps to Dominate the Market
- Metal soap is the majorly used thickener for grease production, as it determines the grease properties. These include simple and complex metallic soaps (simple soaps include single fatty acids, whereas complex soaps have multiple fatty acids as complexing agents).
- Thickener acts as an agent that sets the grease apart from fluid lubricants. These are molecules, particles, or polymers that are partially soluble in lubricating fluid and impart a semi-solid consistency to the grease.
- Metallic soap thickener is used in various industries, such as automotive, construction and off-highways, general manufacturing, steel, mining, and other industries, due to its high mechanical stability and temperature tolerance characteristics.
- Lithium, aluminum, sodium, and calcium are the majorly used metals in these thickeners. Organic acids are being added as complexing agents to conventional metal soaps, in order to attain better load-carrying properties and achieve higher dropping points.
- Complex type thickeners have been witnessing the highest demand growth in the recent years, owing to their enhanced properties compared to simple thickeners. Complex thickeners provide improved temperature resistance, and they may not loose their structure as the temperatures approach 300ºC. Lithium complex is consumed mostly in this category, with growing demand for high performance greases. Other majorly used complex type thickeners include aluminum complex, sodium complex, and calcium complex.
- Additionally, with the lithium prices being volatile, the manufacturers have been actively involved in search of other raw materials. Innovations are being made in the lithium complex used where diacid is being replaced with borates as a raw material. This, in turn, is reducing the production time and cost to the manufacturer.
- Owing to the above-mentioned factors, the market for grease is expected to grow in the region during the forecast period.
- The German economy is the largest in Europe and the fifth-largest in the world. In 2019, the German economy grew by about 0.5%, which had been its weakest growth rate in the last five years. The country's economic growth was affected by various factors, such as trade tensions leading to reduced exports, and recent government policies on debts and fiscal adjustments. The country plans to prevent the further downfall of the economy due to the COVID-19 impact by announcing the availability of funds (of over USD 600 billion), to ensure growth and smooth functioning in various public sectors in the near future.
- Till now, Germany has withstood the pandemic better than other European countries, recording fewer COVID-19 deaths. Its economy has been relatively strong during more than six weeks of lockdown, owing to generous stimulus packages and a decision to keep open factories and construction sites. These efforts are expected to maintain market stability in the near future.
- According to the Fraunhofer Institute for Solar Energy Systems, the wind power generated in the country in the first half of 2020 was approximately 75TWh. This value is about 11.7% above what was recorded in 2019. The wind power generation increased in the month of February, primarily due to numerous winter storms. The share of the net generation of electricity through wind power increased to 45%, which can also be attributed to a dip in overall energy (majorly other energy forms), due to the coronavirus crisis. However, the number also reflects several underlying policy shifts, including the shutdown of nuclear and coal power plants that were carried out in late 2019.
- In Germany, automotive production has seen a decline of 9% in 2019, compared to that of 2018 (recording a number of 4,661,328 units). Moreover, in 2020, the car manufacturing industry is passing through a scathing period of lockdown, production halts, and a slump in sales. The auto giants, like Volkswagen, has restarted production activities in early May.
- The global aerospace industry is facing a huge crisis due to the COVID-19 pandemic. The global travel restrictions and diminishing demand have brought air traffic (especially passenger) to a virtual standstill. However, the country is expected to get an immediate fiscal impulse of around EUR 456.5 billion for the aviation sector.
- In the marine industry, Germany has experienced a halt in the production of new ships as the COVID-19 has led to short-term distortions and caused considerable uncertainties for medium-term development.
- The German government has permitted three construction giant contractor associations in the country, namely, ZDB, HDB, and BVMB, in order to continue construction activities despite the COVID-19 crisis. Thus, the construction work in building construction, road construction, and hydraulic engineering is expected to support economic recovery when the crisis is over.
- Owing to the aforementioned factors, above the demand for the grease market is likely to increase in the later phases of the forecast period after witnessing a slowdown in 2020 due to COVID-19 pandemic.
The market studied is highly consolidated among the top five players. The top companies have been utilizing competitive strategies and investments to retain and expand their shares. The top five players, namely FUCHS, Royal Dutch Shell, Lukoil, Lubrita, and Axel Christiernsson International AB, account for about 67% of the market studied.
- The market estimate (ME) sheet in Excel format
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Table of Contents
1.2 Scope of the Study
4.1.1 Increasing Adoption of Higher Performance Greases in Wind Power and Electric Vehicle Industries
4.1.2 Increasing Adoption of Higher Performance Greases in Wind Power and Electric Vehicle Industries
4.1.3 Booming Wood Pellet Production
4.2.1 Impact of COVID-19 Outbreak
4.3 Industry Value Chain Analysis
4.4 Porter’s Five Forces Analysis
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Consumers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products and Services
4.4.5 Degree of Competition
5.1.1 Metal Soaps
5.1.2 Other Thickeners
5.2 End-user Industry
5.2.1 Power Generation
5.2.2 Automotive and Other Transportation
5.2.3 Heavy Equipment
5.2.4 Food and Beverage
5.2.5 Metallurgy and Metalworking
5.2.6 Chemical Manufacturing
5.2.7 Other End-user Industries
5.3.2 United Kingdom
5.3.8 Rest of Europe
6.2 Market Share Analysis
6.3 Strategies Adopted by Leading Players
6.4 Company Profiles
6.4.1 Axel Christiernsson International AB
6.4.2 Brugarolas SA
6.4.3 Calumet branded products, LLC
6.4.4 Carl Bechem GmbH
6.4.6 Chevron Corporation
6.4.7 CONDAT Group
6.4.8 ExxonMobil Corporation
6.4.10 Gazpromneft - Lubricants Ltd
6.4.11 JXTG Nippon Oil & Energy Europe Limited (ENEOS)
6.4.12 Klüber Lubrication
6.4.15 Petrol Ofisi
6.4.16 PETRONAS Lubricants International
6.4.17 Royal Dutch Shell
7.2 Other Opportunities