Greases Procurement Category Market Research Report from IBISWorld Has Been Updated

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The price of grease has risen slowly in the past three years due to a combination of strong postrecession demand and declining oil prices; in the next three years, the price of grease is forecast decrease slightly as the surge in postrecession demand slows and oil prices decline even further. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has updated a report on the procurement of Greases in its growing collection of procurement category market research reports.

IBISWorld procurement market research
The price of grease has risen slowly in the past three years due to a combination of strong postrecession demand and declining oil prices.

Greases have a buyer power score of 3.9 out of 5, indicating that buyers enjoy somewhat of an advantage when it comes to negotiating supply agreements. Although grease products vary in terms of their viscosity, base oil type, additives and price, the vast majority of these grease characteristics are standardized among suppliers, says IBISWorld analyst Kevin Young. As such, there is a low level of specialization across grease products, benefiting buyers by increasing product homogeneity and easing the selection process. Furthermore, while there is a number of large suppliers, about half of the market is comprised of small and medium-size suppliers. Consequently, buyers have a plethora of options from which to choose when sourcing greases, including manufacturers, wholesalers, retailers and other resellers. Product commoditization and the widespread availability of vendors foster intense price competition among manufacturers, wholesalers and retailers alike. Major market players include Royal Dutch/Shell Group, BP PLC and Exxon Mobil Corp.

Weak price growth in 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 estimated annualized rate of only 0.7% during the past three years due, in part, to declining oil prices, continues Young. Oil is the primary input used to manufacture grease; as such, oil prices have a major impact on grease prices. The recent slide in oil prices is, consequently, beneficial to buyer power and is forecast to result in a slight decrease in prices throughout the next three years.

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 more suitable for lubricating industrial equipment and machinery. Also, high price volatility (primarily driven by volatile oil prices) has made it harder for buyers to gauge future product prices. Nonetheless, weak price growth, low specialization and the large number of suppliers in this 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, which are 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 makes greases a popular choice for lubricating heavy machinery and other industrial equipment that 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.

  • Executive Summary
  • Pricing Environment

-- Price Fundamentals
-- Benchmark Price
-- Pricing Model
-- Price Drivers
-- Recent Price Trend
-- Price Forecast

  • Product Characteristics

-- Product Life Cycle
-- Total Cost of Ownership
-- Product Specialization
-- Substitute Goods
-- Regulation
-- Quality Control

  • Supply Chain & Vendors

-- Supply Chain Dynamics
-- Supply Chain Risk
-- Imports
-- Competitive Environment
-- Market Share Concentration
-- Market Profitability
-- Switching Costs

  • Purchasing Process

-- Buying Basics
-- Buying Lead Time
-- Selection Process
-- Key RFP Elements

  • Negotiation Questions
  • Buyer Power Factors
  • Key Statistics

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.

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Gavin Smith
IBISWorld Inc.
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