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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


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


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


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


A Review of the Lithium Shortage


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


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


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


A Review of Sebacic Acid Shortage


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


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


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


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


Understanding The Trends Will Help Predict The Future


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


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


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


CA Sulfonate Grease – One Solution to Shortages


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


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


Application Guide

•! Automotive GC-LB grease •! Steel mill grease •! Mining and off-highway heavy machinery grease •! Synthetic sulfonates •! Food grade sulfonates


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


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


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


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



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



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


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.

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