Los Angeles, CA (PRWEB) June 15, 2014
Greases have a buyer power score of 3.3 out of 5. This score reflects the fact that buyers enjoy somewhat of an advantage when it comes to negotiating supply agreements. Grease products are largely differentiated by their viscosity, base oil type, additives and price; however, the vast majority of these grease characteristics are standardized among suppliers. As such, the low level of specialization among greases benefits buyers. Furthermore, while a number of large suppliers exist, about half the vendor market comprises small and medium-size suppliers. According to IBISWorld analyst Sean Windle, this fact gives buyers a plethora of options from which to choose when sourcing greases, including manufacturers, wholesalers, retailers and other resellers. Major market suppliers include Ashland Inc., Axel Americas LLC and BP PLC.
Weak price growth over the past three years has also benefited buyers. Despite the postrecession surge in domestic demand from the industrial sector, the average price for greases has risen at an annualized rate of only 0.7% during the past three years due to declining oil prices, continues Windle. Oil is the primary input used to manufacture grease; as such, oil prices have a major impact on grease prices.
One factor that diminishes buyer power is the lack of substitutes for grease. In most scenarios, oil lubricants cannot be used in place of grease because grease's viscosity makes it suitable for lubricating industrial equipment and machinery. High price volatility (primarily driven by volatile oil prices) has also made it harder for buyers to gauge future product prices. Nonetheless, weak price growth, low specialization and a large number of suppliers in a moderately concentrated marketplace provide an overall advantage to buyers sourcing grease products. For more information, visit IBISWorld’s Greases procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of greases, a type of semisolid lubricant consisting of oil and a thickener that acts like a sponge to retain the oil. Other ingredients can be added to grease, including rust inhibitors and oxidation preventatives. Because of its thicker consistency, grease has a longer working life than liquid oil lubricants and can perform better under high temperatures. This fact makes greases a popular choice for heavy machinery and other industrial equipment, which is hard to take apart and expensive to maintain. Furthermore, silicone greases are often used to lubricate rubber components due to oil’s corrosive effect on rubber. Suppliers include retailers, wholesalers and, primarily, manufacturers.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.