Metalworking fluids is the second-largest category within the industrial lubricant segment in Russia. The segment has been stable without large variations over the years. However, due to the steady annual growth of automotive production in the country and increasing exports of steel and primary metals over the past few years, it is expected that demand for metalworking fluids will keep growing in line with growth in the manufacturing sector.
The transportation equipment manufacturing, and automotive industries are leading consumers of metalworking fluids in Russia. Other major contributors to metalworking fluid consumption in the transportation equipment sector include all forms of railroad equipment building, high-performance aircraft manufacturing, defense and aerospace, shipbuilding, agricultural machinery, tractors, and construction equipment.
Removal fluids also referred to in the industry as “cutting fluids,” “cutting oils,” or “coolants” are the largest product category, accounting for almost half of overall Russian metalworking fluids demand. The penetration of synthetics in the Russian removal fluids market is relatively low because they are expensive and cannot be used in all types of applications due to their specific features. However, the share of semi-synthetic fluids is significant. Driven by trends toward increased efficiency and a need for better performance, better cooling, and longer life, the penetration of semi-synthetics in the Russian metalworking fluid market is growing.
Russian metalworking fluid has a noteworthy supplier landscape, where a little over 30% of the market is taken by the small enterprises that produce low-quality, affordable metalworking fluids for use in locally manufactured equipment. These suppliers are typically located around basestock hubs like Cheboksary and Ufa. LUKOIL is an important player in the premium segment. Volgokhimneft, Rosneft, Oleokam, and Rikos are other important local players. Gazpromneft-Lubricants recently introduced its metalworking fluid product portfolio. Quaker Houghton, and Henkel are among the top foreign suppliers.
In general, one of the main criteria for Russian customers when selecting a metalworking fluid is the price of the lubricant. However, this is not the only aspect. Original equipment manufacturer requirements may limit lubricant choice for foreign equipment owners, leaving the end user with no other option than using more expensive imported lubricants, drawn from a short approval list. For example, Abamet, an exclusive supplier of turning and milling machinery from HAAS (the United States) and electrical discharge machines from Mitsubishi Electric (Japan) within warranty period recommends using only Blaser Swisslube metalworking fluids.
Within the past decade, environmental awareness in the industry has been growing. There are increasing controls on the disposal of used emulsions and recycling processes. This is mostly due to sanctions imposed by the government. The number of chemical waste management companies is growing in Russia and it is expected that their role and importance will grow in the forecast period.
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