(Food-Beverage-News.Com, June 17, 2022 ) The report "Grease Market by Base Oil (Mineral, Synthetic, Bio-Based), Thickener Type (Metallic Soap, Non-Soap, Inorganic), End-Use Industry (Automotive, Construction, General Manufacturing, Metal, Mining, Food & Beverage, Power) - Global Forecast to 2025", is projected to reach USD 6.1 billion by 2025, at a CAGR of 2.9% from USD 5.3 billion in 2020. The growth of the grease market is primarily triggered by the rise in automation in various end-use industries. Manufacturing, construction, and mining are some of the industries that use various heavy load equipment, which require regular lubrication. Owing to increasing competition and growing challenges in manual operations, the use of highly updated technology is vital for the growth of all these industries.
As a result of the pandemic, a negative growth of the grease market is expected for 2020. APAC countries had taken preventive measures, such as social distancing at an early stage, to stop the spread of the virus. As per the reports, the highest reduction in vehicle traffic was seen in South Asia constituting countries, such as India, Bangladesh, and Sri Lanka and Central Asian countries.
According to the IMF, the GDP growth rate of the region will fall to 0% in 2020. China, India, and South Korea will also have slow economic growth. The GDP growth rate in China is expected to drop at 1.2% in 2020.
Rise in automation in various industries
Manufacturing, construction, and mining are some of the industries that use various heavy load equipment, which require regular lubrication. Owing to increasing competition and growing challenges in manual operations, the use of highly updated technology is vital for the growth of all these industries. The increasing cost of workforce and safety requirements is also augmenting the demand for process automation. The use of automation helps with increased production rate, reduced labor cost, and improved worker safety. Hence, a majority of companies are automating their operating systems, which, in turn, is driving the consumption of grease.
Lower crude oil prices to benefit grease suppliers after COVID-19
The grease market is significantly influenced by the variation in the crude oil market. Between 2008 and 2014, the crude oil market enjoyed a profitable run as prices hit USD 100 barrier per barrel and beyond. The Brent crude was priced at USD 140 per barrel, and WTI was priced at USD 120 per barrel. In 2015, crude prices dropped to record lows. Such volatile prices affect the margins of manufacturing companies.
The majority of grease products are based on mineral oil, which is sourced from crude oil. Therefore, the prices of grease depend on crude oil prices. Price change has a huge impact on the grease market.
The key market players profiled in the report include as Royal Dutch Shell PLC. (Netherlands), The Chevron Corporation (US), Idemitsu Kosan Co., Ltd. (Japan), Sinopec Corporation (China), BP p.l.c. (UK), Total SA (France), and ExxonMobil Corporation (US), among others.
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