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© 2017 The Lubrizol Corporation, all rights reserved. © 2017 The Lubrizol Corporation, all rights reserved. © 2017 The Lubrizol Corporation, all rights reserved.
Impacts and Trends On The Grease Industry Roberto Saruls – Lubrizol Brazil
Lubgrax 2017
© 2017 The Lubrizol Corporation, all rights reserved. 2
Mass production ! Mass customization?
We Live in a Changing World
The Third Industrial Revolution is coming: •! Cheap off-grid energy •! 3D printing •! Nanotechnology •! Automation •! Robotics •! New materials •! Internet of things
Your business model will be challenged: •! Comparative advantage •! Opportunity cost •! Specialization •! Economies of scale •! Barriers to entry •! Inventory •! Just-In-Time
© 2017 The Lubrizol Corporation, all rights reserved. 3
NYC Easter Parade: 1900 Find the Car!
NYC Easter Parade: 1913 Find the Horse!
Disruptive Change is Nothing New
Image sources: https://www.archives.gov/exhibits/picturing_the_century/images/newcent_001_v11.jpg; http://www.boweryboyshistory.com/wp-content/uploads/2013/03/7.jpg
© 2017 The Lubrizol Corporation, all rights reserved. 4
We need to manage our business for the way the world will be; not the way it is
•! Environmental regulations –! Climate change –! Air emissions –! Water consumption
•! Urbanization format –! Dense, disorganized –! Structured, graduated
Change Creates Uncertainty – and Opportunity
Industrial – 2027 Business Environment
•! Chemical restrictions (regulatory | extra-regulatory) !! Hazard vs. risk !! Life-cycle assessment !! Alternatives assessment
© 2017 The Lubrizol Corporation, all rights reserved. 5
Approving second suppliers of the same type of material is no longer enough
The Influence of Regulatory Changes
•! Regulatory changes have impacted the availability of critical raw materials –! Battery demand in electric vehicles causing a shortage of
lithium –! New air quality regulations in China causing a shortage of
sebacic acid –! How to address these issues and others from a technology
and supply chain standpoint
© 2017 The Lubrizol Corporation, all rights reserved. 7
Lithium, 54.5%
Lithium Complex, 19.7%
Calcium, 6.8%Calcium Complex, 0.8%
Calcium Sulfonate, 2.8%Aluminum, 4.0%
Polyurea, 5.9%Sodium, 0.4%
Non-soap, 3.7%
Other soap, 1.3%
Global Market Data: Volume by Thickener Type
Total 2015 Worldwide Sales: 1.12 million tons
Source: NLGI 2015 Annual Production Survey
© 2017 The Lubrizol Corporation, all rights reserved. 8
Lithium Demand Outside of Grease (Batteries) End Use Lithium content (grams)
Mobile phones 1 – 3 Smartphones 2 – 6
Tablets 20 – 30 Laptops 30 – 40
Powertools 40 – 60 Hybrid electric vehicles (HEVs) 800 – 3,600 Plug-in hybrid vehicles (PHEVs) 1,000 – 10,000
Pure electric vehicles (EVs) 8,000 – 63,000
Tesla™ model S with a 70 kWh battery uses 63,000 grams of Li! 10,000
Source: http://www.dakotaminerals.com.au/index.php/lithium/about-lithium; car image: http://o.aolcdn.com/commerce/autodata/images/USC30TSC021B021001.jpg
© 2017 The Lubrizol Corporation, all rights reserved. 9
Supply is not keeping up with demand
Lithium Shortage Is Not Short Term
0
10
20
30
40
50
2010 2013 2018 2020 2025
World Consumption of Lithium (kilotons)
Batteries Lubricants
© 2017 The Lubrizol Corporation, all rights reserved. 11
Finding secondary suppliers of sebacic acid is not the answer
Why is Shortage of Sebacic Acid Significant?
•! There are three complexing agents typically used for Lithium Complex grease: –! Azelaic acid –! Borated esters –! Sebacic acid ! Short Supply
© 2017 The Lubrizol Corporation, all rights reserved. 12
Sebacic Acid: Castor Oil Plant
•! Main producer countries: –! India –! China –! Brazil –! Others (West Indies & Africa)
•! Market-influencing factors: –! Monsoon –! Crop sizes –! Inter-seasonal variation in price:
"! Price tends to firm up during the planting period (Jun-Jul) and eases down during the harvesting period (Dec-Mar)
–! Local speculation: "! Castor seed growers and crushers hoard the commodity in expectation of
better prices
© 2017 The Lubrizol Corporation, all rights reserved. 13
Production (mainly China & India)
Consumption (tons)
Sebacic Acid: Producers and Applications
China 25,000
Europe 20,000
Japan 8,000
USA 8,000
Korea 7,000
Others 7,000
Sebacic India Ltd
Polymers production
Green polyamide (Nylon 6-10)
Plasticizers, lubricants, and corrosion retardants
Cosmetics
Tongliao Dong Feng Sinochem
Applications
© 2017 The Lubrizol Corporation, all rights reserved. 14
Alternate technology needs to be explored
Why is Sebacic Acid In Short Supply?
•! In November 2016, Chinese government decided to stop industrial activities in some areas due to pollution issues
•! >90% of sebacic acid is manufactured in China •! Two companies that are based in the restricted area
account for 45% of global sebacic acid production
© 2017 The Lubrizol Corporation, all rights reserved. 15
Understanding The Trends Will Help Predict The Future
© 2017 The Lubrizol Corporation, all rights reserved. 16
Demand for higher performing greases by OEM and end-user
Grease Market Driver Trends
Improving Technology
Extended service intervals
Reduced consumption
Smaller components
Increased speeds and loads
Reduce wear
and loads Diverse
Requirements
Reduce wear
Increased Reliability
Improve component life
Increased power output
!"#$$$$"%&$'()*($
Extended service
consumption
Operator Cost Concerns Water resistance
© 2017 The Lubrizol Corporation, all rights reserved. 17
Grease Market Trends •! Produced in high volume using mineral oil •! Low specification multipurpose applications, Li, Ca, mixed soap •! Selling price = $1.00 to $2.00 per pound •! Market growth = - 5% per year (shrinking)
•! Often complex soap produced with highly refined or synthetic oil •! More demanding specifications than commodity. Lithium Complex, Polyurea and
Calcium Sulfonate •! Selling price = $2.00 to $4.00 per pound •! Market growth = 5% per year
•! May contain high-priced additives or solid lubricants •! Fulfills tight specification requirements •! Selling price = $4.00 to $20.00+ per pound •! Market growth = 5% per year
Commodity
High Specification Commodity
Specialty
© 2017 The Lubrizol Corporation, all rights reserved. 18
The alternate technology choice depends on what market you want to enter
Comparison of Thickeners
Thickener Lithium Complex
Aluminum Complex
Polyurea Calcium Sulfonate
Advantages •! Multi-purpose •! Good pumpability
•! Multi-purpose •! Water
resistance
•! Ashless •! Excellent oxidation
resistance •! Low noise •! Sealed for life
•! Inherent EP/AW •! Good mechanical
stability •! Good corrosion
resistance
Disadvantages •! Additives needed for performance
•! Rising raw material cost
•! Not food grade
•! Poorer oxidation resistance
•! Manufacturing issues •! Poorer mechanical
stability •! Additives needed for
rust, EP & corrosion
•! Poorer low temperature pumpability
•! Availability
© 2017 The Lubrizol Corporation, all rights reserved. 19
CA Sulfonate Grease – One Solution to Shortages
© 2017 The Lubrizol Corporation, all rights reserved. 20
Grease Market Trends - Calcium Sulfonate Grease NLGI Production Volumes 2001 – 2015
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tonn
esNorth America Global
Based on NLGI grease production surveys
© 2017 The Lubrizol Corporation, all rights reserved. 21
Typical Calcium Sulfonate Grease Properties Without additional additives
Property Test Method Typical Values
Base oil viscosity at 40 ºC (mm2/s) D445 120
Dropping point (ºC) D2265 >316
4-ball wear scar diameter (mm) D2266 <0.4
Timken OK load (pounds) D2509 "60
4-Ball EP weld load (kg) D2596 400
Water Corrosion (rating) D1743 Pass
Water wash out (%) D1264 <2.0
Water spray off (%) D4049 15
© 2017 The Lubrizol Corporation, all rights reserved. 22
Application Guide
•! Automotive GC-LB grease •! Steel mill grease •! Mining and off-highway heavy machinery grease •! Synthetic sulfonates •! Food grade sulfonates
© 2017 The Lubrizol Corporation, all rights reserved. 23
Application - Enhance the Performance
Gelling
Additives
Automotive GC-LB grease
Steel mill grease Off-highway duty grease
Starting 400TBN sulfonate
Gelling
Additives
Starting 400TBN sulfonate
Unadditized grease base Excellent Antiwear / load carrying Water spray off protection Rust Inhibition
Mining greases
Additives Additives Additives
© 2017 The Lubrizol Corporation, all rights reserved. 24
Example: Steel Mill Calcium Sulfonate Grease
•! Base grease was cut to NLGI 2 grade with ISO VG 460 oil blend and treated with –! Rust inhibitor –! Anti-oxidant –! Polysulfide –! Copper passivator
•! Then thoroughly mixed and de-aerated •! Tested against typical steel mill requirements
Then thoroughly mixed and de-aerated
© 2017 The Lubrizol Corporation, all rights reserved. 25
Example: Steel Mill Calcium Sulfonate Grease
+*,-)*./$ 0)(.$1).2,&$ 3)456*)1)%.$7$0/-689:$ ;5::/$<,*15:9.)&$=*)9()$
>9()$,6:$?6(8,(6./$$@AB$CD$E11F7(G$ HAAI$ JK!$LM$ANB$
EAOB$P$AQBG$ AAA$
>9()$,6:$LJ$ HFFRB$ QI$16%6151$ SON$'%T,*U)&$V$T,*U)&$-)%).*9W,%$ HFSR$ FNI$X$FQI$ FNY$V$FNY$
K2)9*$(.9Z6:6./$ HFSR$ [\$]SBBU$%,$(6=%6^89%.$829%=)$ _R$
061U)%$!`$:,9&$E-,5%&(G$ HFIBQ$ NB$16%6151$ NI$
AX>9::$"+$EU=G$ HFIQN$ T):&$:,9&$a$IBB$ !"#$AX>9::$T)9*$E11G$ HFFNN$ (89*$&691).)*$bBcAI$ BcOA$]9.)*$8,**,(6,%$ HSRAO$ -9(($ -9(($Water washout (%) D1264 2.75 maximum 1.4 Water spray off (%) D4049 25 maximum <10 Oxidation stability (psi) D942 #P 100 hours $ 5 4.7
D4049
D2596
© 2017 The Lubrizol Corporation, all rights reserved. 26
Example 2: Calcium Sulfonate Grease to Meet NLGI GC-LB
•! Base grease was additized with –! Zinc/sulfur/phosphorus package –! Anti-oxidant –! Anti-fretting wear additive
•! Then thoroughly mixed and de-aerated
•! Tested against GC-LB requirements –! With some additional tests
© 2017 The Lubrizol Corporation, all rights reserved. 27
Example 2: Calcium Sulfonate Grease to Meet NLGI GC-LB
Property Notes Method Requirement Result
Worked penetration NLGI grade 2 D217 220 - 340 281
Dropping point (°C) D2265 >220 >316
Four ball wear Wear scar diameter (mm) D2266 $ 0.60 0.48
Four ball EP LWI (kgf )
D2596 " 30 107.2
Weld Load (kgf) " 200 620
Elastomer compatibility
CR, (% vol. change)
D4289
0 to +40 +30
CR, hardness change (Shore A) -15 to 0 -10
NBR-L (% vol. change) -5 to +30 +21
NBR-L, hardness change (Shore A) -15 to +2 -9
Oil separation (%) D1742 $ 6.0 0
© 2017 The Lubrizol Corporation, all rights reserved. 28
Example 2: Calcium Sulfonate Grease to Meet NLGI GC-LB
Property Notes Method Requirement Result
Rust max. rating D1743 Pass Pass
Fretting protection Weight loss (mg) D4170 $ 10.0 2.1 & 1.5
Low temp. torque @ -40 °C (Nm) D4693 $15.5 5.24
Water wash out @ 80 °C (%) D1264 $15 9.6 High temp. life, hours D3527 " 80 80
HT leakage tendency grams D4290 $10 0.5
D4170
D1264 D4290
D1743
© 2017 The Lubrizol Corporation, all rights reserved. 29
The successful company 20 years from now will be the one that can identify the changes in their market and have the courage to act on them
Conclusion
•! We need to have multiple ways of addressing the same issue
•! Calcium sulfonate greases could be an option for lithium and Sebacic acid supply issues
•! We need to manage our business based on the way the
world will be rather than how the world is today
© 2017 The Lubrizol Corporation, all rights reserved.
Working together, achieving great things When your company and ours combine energies, great things can happen. You bring ideas, challenges and opportunities. We’ll bring powerful additive and market expertise, unmatched testing capabilities, integrated global supply and an independent approach to help you differentiate and succeed.